## Price of Bond Solution

STEP 0: Pre-Calculation Summary
Formula Used
Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period
PB = FV*(1+IDR)^HP
This formula uses 4 Variables
Variables Used
Price of Bond - Price of Bond refers to the amount of money an investor pays to purchase the bond from the issuer or another investor in the secondary market.
Face Value - Face Value is the amount of money that the issuer of a bond agrees to repay the bondholder at the bond's maturity date.
Implied Discount Rate - Implied Discount Rate is the interest rate that equates the present value of the bond's future cash flows to its current market price.
Holding Period - Holding Period refers to the duration of time that an investor owns an asset from the moment it is purchased until it is sold.
STEP 1: Convert Input(s) to Base Unit
Face Value: 95 --> No Conversion Required
Implied Discount Rate: 0.06 --> No Conversion Required
Holding Period: 5 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
PB = FV*(1+IDR)^HP --> 95*(1+0.06)^5
Evaluating ... ...
PB = 127.131429872
STEP 3: Convert Result to Output's Unit
127.131429872 --> No Conversion Required
127.131429872 127.1314 <-- Price of Bond
(Calculation completed in 00.004 seconds)
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## Credits

Created by Aashna
IGNOU (IGNOU), India
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Verified by Surjojoti Som
Rashtreeya Vidyalaya College of Engineering (RVCE), Bangalore
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## < 18 Strategic Financial Management Calculators

Money Market Discount Rate
Money Market Discount Rate = (Year/Days of Maturity)*(Face Value of Money Market Instrument-Present Value of Money Market Instrument)/Face Value of Money Market Instrument
Effective Convexity
Effective Convexity = (Price of Bond When Yield is Decreased+Price of Bond When Yield is Increased-(2*Initial Price of Bond))/((Change in Curve)^2*Initial Price of Bond)
Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest))
Change in Price of Full Bond
Percentage Change in Price of Bond = (-Annual Modified Duration*Change in Yield)+(1/2*Annual Convexity*(Change in Yield)^2)
Value of Right using New Shares
Value of Right = Number of New Shares*(Market Price-Issue Price of New Share)/Total Number of All Shares
Single Month Mortality
Single Month Morality = Prepayment for a Month/(Beginning Mortgage Balance for Month-Scheduled Principal Repayment for Month)
Value of Right
Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share
Cost of Equity
Cost of Equity = ((Dividend in Next Period/Current Share Price)+(Dividend Growth Rate*0.01))*100
Unlevered Beta
Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity)))
Levered Beta
Levered Beta = Unlevered Beta*(1+((1-Tax Rate)*(Debt/Equity)))
Price Value of Basis Point
Price Value of Basis Point = (Price of Bond When Yield is Decreased-Price of Bond When Yield is Increased)/2
Price of Bond
Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period
Approximate Macaulay Duration
Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest)
Conversion Parity Price
Conversion Parity Price = Value of Convertible Security/Conversion Ratio
Share Exchange Ratio
Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price
Earnings Yield
Earnings Yield = (Earnings per Share/Market Price per Share)*100
Dividend Rate
Dividend Rate = (Dividend per Share/Current Share Price)*100
Earnings Yield using PE Ratio
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## Price of Bond Formula

Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period
PB = FV*(1+IDR)^HP

## What is Price of Bond ?

Price of Bond is the amount of money an investor pays to purchase the bond from the issuer or another investor in the secondary market. The bond price can vary based on factors such as interest rates, credit quality of the issuer, and time to maturity. For instance, if the market interest rate is currently 4%, the bond will trade at a premium because its coupon rate is higher than the current market rate, making it more attractive to investors. Conversely, if the market interest rate is 6%, the bond will trade at a discount. In summary, the price of a bond is a key measure that reflects the present value of its future cash flows, influenced by market interest rates, credit quality, and time to maturity. Investors must make informed decisions about buying, holding, or selling bonds.

## How to Calculate Price of Bond?

Price of Bond calculator uses Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period to calculate the Price of Bond, Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity. Price of Bond is denoted by PB symbol.

How to calculate Price of Bond using this online calculator? To use this online calculator for Price of Bond, enter Face Value (FV), Implied Discount Rate (IDR) & Holding Period (HP) and hit the calculate button. Here is how the Price of Bond calculation can be explained with given input values -> 127.1314 = 95*(1+0.06)^5.

### FAQ

What is Price of Bond?
Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity and is represented as PB = FV*(1+IDR)^HP or Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period. Face Value is the amount of money that the issuer of a bond agrees to repay the bondholder at the bond's maturity date, Implied Discount Rate is the interest rate that equates the present value of the bond's future cash flows to its current market price & Holding Period refers to the duration of time that an investor owns an asset from the moment it is purchased until it is sold.
How to calculate Price of Bond?
Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity is calculated using Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period. To calculate Price of Bond, you need Face Value (FV), Implied Discount Rate (IDR) & Holding Period (HP). With our tool, you need to enter the respective value for Face Value, Implied Discount Rate & Holding Period and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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