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Yield to Call for Callable Bond Formula

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Yield to Call calculates the yield if a callable bond is called before maturity. Check FAQs

YTC = (\frac{CP + \frac{C - CBP}{n y}}{\frac{C + CBP}{2}})

YTC - Yield to Call?CP - Coupon Payment?C - Theoretical Price of Call Option?CBP - Current Bond Price?n_y - Number of Years to Track Growth?

Yield to Call for Callable Bond Example

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Here is how the Yield to Call for Callable Bond equation looks like with Values.

Here is how the Yield to Call for Callable Bond equation looks like with Units.

Here is how the Yield to Call for Callable Bond equation looks like.

0.2523 = (\frac{20 + \frac{1220 - 150}{7}}{\frac{1220 + 150}{2}})

0.2523 = (\frac{20 + \frac{1220 - 150}{7}}{\frac{1220 + 150}{2}})

0.2523 = (\frac{20 + \frac{1220 - 150}{7}}{\frac{1220 + 150}{2}})

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Yield to Call for Callable Bond Solution

Follow our step by step solution on how to calculate Yield to Call for Callable Bond?

FIRST Step Consider the formula

YTC = (\frac{CP + \frac{C - CBP}{n y}}{\frac{C + CBP}{2}})

Next Step Substitute values of Variables

∴

YTC = (\frac{20 + \frac{1220 - 150}{7}}{\frac{1220 + 150}{2}})

Next Step Prepare to Evaluate

∴

YTC = (\frac{20 + \frac{1220 - 150}{7}}{\frac{1220 + 150}{2}})

Next Step Evaluate

∴

YTC = 0.252346193952033

LAST Step Rounding Answer

∴

YTC = 0.2523

Yield to Call for Callable Bond Formula Elements

Variables

Yield to Call

Yield to Call calculates the yield if a callable bond is called before maturity.

Symbol: YTC

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Yield to Call

Coupon Payment

Coupon Payment is a periodic interest payment that the bondholder receives during the time between when the bond is issued and when it matures.

Symbol: CP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Coupon Payment

Theoretical Price of Call Option

Theoretical Price of Call Option is based on the current implied volatility, the strike price of the option, and how much time is left until expiration.

Symbol: C

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Theoretical Price of Call Option

Current Bond Price

Current Bond Price is the present discounted value of the future cash stream generated by a bond.

Symbol: CBP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Current Bond Price

Number of Years to Track Growth

Number of Years to Track Growth is the total number of years over which the growth occurred.

Symbol: n_y

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Years to Track Growth

Other formulas in Bond Yield category

Go Yield to Maturity

YTM = \frac{CP + (\frac{FV - Price}{Yrs})}{\frac{FV + Price}{2}}

Go Current Bond Yield

CBY = \frac{CP}{CBP}

Go Coupon Bond Valuation

CB = C A \cdot (\frac{1 - {(1 + YTM)}^{- n PYr}}{YTM}) + (\frac{P vm}{{(1 + YTM)}^{n PYr}})

Go Bank Discount Yield

BDY = (\frac{D}{FV}) \cdot (\frac{360}{DTM}) \cdot 100

How to Evaluate Yield to Call for Callable Bond?

Yield to Call for Callable Bond evaluator uses Yield to Call = ((Coupon Payment+(Theoretical Price of Call Option-Current Bond Price)/Number of Years to Track Growth)/((Theoretical Price of Call Option+Current Bond Price)/2)) to evaluate the Yield to Call, The Yield to Call for Callable Bond formula is defined as a formula which calculates the yield if a callable bond is called before maturity. It considers the call price and the remaining years until the bond can be called. Yield to Call is denoted by YTC symbol.

How to evaluate Yield to Call for Callable Bond using this online evaluator? To use this online evaluator for Yield to Call for Callable Bond, enter Coupon Payment (CP), Theoretical Price of Call Option (C), Current Bond Price (CBP) & Number of Years to Track Growth (n_y) and hit the calculate button.

FAQs on Yield to Call for Callable Bond

What is the formula to find Yield to Call for Callable Bond?

The formula of Yield to Call for Callable Bond is expressed as Yield to Call = ((Coupon Payment+(Theoretical Price of Call Option-Current Bond Price)/Number of Years to Track Growth)/((Theoretical Price of Call Option+Current Bond Price)/2)). Here is an example- 0.252346 = ((20+(1220-150)/7)/((1220+150)/2)).

How to calculate Yield to Call for Callable Bond?

With Coupon Payment (CP), Theoretical Price of Call Option (C), Current Bond Price (CBP) & Number of Years to Track Growth (n_y) we can find Yield to Call for Callable Bond using the formula - Yield to Call = ((Coupon Payment+(Theoretical Price of Call Option-Current Bond Price)/Number of Years to Track Growth)/((Theoretical Price of Call Option+Current Bond Price)/2)).

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Yield to Call for Callable Bond Formula

Yield to Call for Callable Bond Example

Yield to Call for Callable Bond Solution

Yield to Call for Callable Bond Formula Elements

Other formulas in Bond Yield category

How to Evaluate Yield to Call for Callable Bond?

FAQs on Yield to Call for Callable Bond

Variable Name