# KBH Applications Alternative Bond Pricing System

KBH Applications Bond Pricing Example:

```
Redemption value, \$100.00
Semi-annual coupon amount, \$1.5625
Semi-annual yield, 1.3735%             [ with this value as one-half the standard yield-to-maturity rate unless the yield rate was determined firstly by the inverse of this bond pricing ]
Redemption date, Feb 25, 2029
Settlement date, Jan 25, 2019
Number of coupon payments remaining, 21

x = bond gain at redemption in decimal-form percentage
y = bond price

x / y = 1.3735 * 21 / 100     [ divided by 100 to develop decimal-form ]

x / y = 0.288435
x = 0.288435y

and

x + y = (1.5625 * 21) + 100   [ here with 100 as the redemption value ]

x + y = 132.8125
0.288435y + y = 132.8125
1.288435y = 132.8125
y = 103.08 as the bond price .

Accrued interest owed to the bond seller is

5/6 * 1.5625 = 1.30 .

Then the inverse of the bond price is

x / y = r * 21 / 100

x / 103.08 = r * 21 / 100
x = 103.08 * r * 21 / 100
x = 21.6468r

and

x + y = (1.5625 * 21) + 100

21.6468r + 103.08 = 132.8125
21.6468r = 29.7325
r = 1.3735% as the semi-annual yield .

```

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