Bond Equivalent Yield Calculator

Calculate Bond Equivalent Yield (BEY)





Formula

The formula to calculate the Bond Equivalent Yield (BEY) is:

\[ BEY = \left(\frac{FV - P}{P}\right) \times \left(\frac{365}{d}\right) \]

Where:

Example

Let's say the face value (\( FV \)) is $1,000, the current price (\( P \)) is $950, and the days to maturity (\( d \)) is 180. Using the formula:

\[ BEY = \left(\frac{1000 - 950}{950}\right) \times \left(\frac{365}{180}\right) \]

We get:

\[ BEY ≈ 0.1053 \times 2.0278 ≈ 0.2135 \]

So, the Bond Equivalent Yield (\( BEY \)) is approximately 21.35%.

What is Bond Equivalent Yield?

Bond Equivalent Yield (BEY) is a financial metric used to calculate the annualized yield of a bond. It is a useful tool for investors to compare the yields of different bonds with varying maturities and coupon rates on an equal basis. BEY is particularly significant because it enables investors to make informed decisions about potential investments.

Extended information about "Bond-Equivalent-Yield-Calculator"

Calculate Taxable Equivalent Bond Yield

Definition: This calculation helps determine the yield on a taxable bond that is equivalent to the yield on a tax-exempt bond.

Formula: \( \text{Taxable Equivalent Yield} = \frac{\text{Tax-Exempt Yield}}{1 - \text{Tax Rate}} \)

Example: \( \text{Taxable Equivalent Yield} = \frac{5\%}{1 - 0.25} \)

What is the Bond Equivalent Yield

Definition: The bond equivalent yield (BEY) is a calculation that converts the yield of a bond with different payment frequencies to an annual yield.

Formula: \( \text{BEY} = \frac{\text{Face Value} - \text{Purchase Price}}{\text{Purchase Price}} \times \frac{365}{d} \)

Example: \( \text{BEY} = \frac{1000 - 950}{950} \times \frac{365}{180} \)

Yield of Bond Calculator

Definition: This calculator helps determine the yield of a bond based on its price and coupon payments.

Formula: \( \text{Yield} = \frac{\text{Coupon Payment}}{\text{Bond Price}} \)

Example: \( \text{Yield} = \frac{50}{950} \)

Bond Yield Calculator from Price

Definition: This calculator helps determine the yield of a bond based on its purchase price and coupon payments.

Formula: \( \text{Yield} = \frac{\text{Coupon Payment}}{\text{Purchase Price}} \)

Example: \( \text{Yield} = \frac{60}{1000} \)

Current Bond Yield Calculator

Definition: This calculator helps determine the current yield of a bond based on its price and coupon payments.

Formula: \( \text{Current Yield} = \frac{\text{Annual Coupon Payment}}{\text{Current Market Price}} \)

Example: \( \text{Current Yield} = \frac{70}{1050} \)