I i 100 appendix a reference information 73 bonds

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Unformatted text preview: ld) with more than one coupon period to redemption: RV PRI = N −1+ 1 + Y M R N 100 × M + DSC ∑ Y K −1+ E K =1 1 + M DSC E R A − 100 × × M E 74 Appendix A: Reference Information where: N = DSC = K = number of coupons payable between settlement date and redemption date (maturity date, call date, put date, etc.). (If this number contains a fraction, raise it to the next whole number; for example, 2.4 = 3) number of days from settlement date to next coupon date summation counter Note: The first term calculates present value of the redemption amount, not including interest. The second term calculates the present values for all future coupon payments. The third term calculates the accrued interest agreed to be paid to the seller. Yield (given price) with more than one coupon period to redemption: Yield is found through an iterative search process using the “Price with more than one coupon period to redemption” formula. Accrued interest for securities with standard coupons or interest at maturity: AI = PAR × RA × ME where: AI = PAR = accrued interest par value (principal amount to be paid at maturity) Source for bond formulas: Lynch, John J., Jr., and Jan H. Mayle. Standard Securities Calculation Methods. New York: Securities Industry Association, 1986. Appendix A: Reference Information 75 Depreciation RDV = CST − SAL − accumulated depreciation Values for DEP, RDV, CST, and SAL are rounded to the number of decimals you choose to be displayed. In the following formulas, FSTYR = (13 − MO1) ÷ 12 Straight-line CST − SAL LIF First year: CST − SAL × FSTYR LIF Last year or more: DEP = RDV Sum-of-the-years’-digits ( LIF + 2 − YR − FSTYR) × (CST − SAL) (( LIF × ( LIF + 1)) ÷ 2) First year: LIF × ( CST − SAL) (( LIF × ( LIF + 1)) ÷ 2) × FSTYR Last year or more: DEP = RDV Declining balance RBV × DB % LIF × 100 where: RBV is for YR 1 First year: Unless CST × DB % × FSTYR LIF × 100 CST × DB % > RDV ; then use RDV LIF × 100 FSTYR If DEP > RDV, use DEP = RDV If computing last year, DEP = RDV 76 Appe...
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