This paper extends the coverage of bond valuation in introductory finance textbooks. Specifically, it extends the basic model for bond valuation to a more versatile model, which can accommodate valuation dates besides those matching the coupon dates of a bond. Such an extension allows the accrued interest to be properly recognized. Various spreadsheet-based exercises with data from bond quotations are proposed, in order to make the bond model more practically relevant and to enhance the learning experience of students. Connections between some bond-specific spreadsheet functions and the underlying time-value concepts are also established.

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Figures1&2.xls (62 kB)
Excel file for Figures 1 and 2