4-12 Bond yields Calculating Yield to Maturity (YTM=r If you are given the price of a bond (pv and the coupon rate, the yield to maturity can be found by solving for r cpn (cpn+ par) Py cpn +.+ 1+r)(1+r) Irwin/McGraw-Hill CThe McGraw-Hill Companies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 4- 12 Irwin/McGraw-Hill Bond Yields Calculating Yield to Maturity (YTM=r) If you are given the price of a bond (PV) and the coupon rate, the yield to maturity can be found by solving for r. PV cpn r cpn r cpn par r t = + + + + + + ( ) ( ) + .... ( ) 1 1 (1 ) 1 2