Determinants of the NPV of a Bond

A company may, before issuing a bond, wonder which conditions this bond has to feature in order to be attractive for investors. In practice, this is done by comparing the "own bond" to be created to a "similar bond" that is traded in the market. The characteristics (price, redemption, and coupon) of this similar bond influence the yield to maturity of the similar bond, which is in turn used to discount the proceeds an investor may have from the own bond. By analyzing different situations, you can learn how different constellations of characteristics of the similar bond affect the net present value of the own bond.


  • [Snapshot]
  • [Snapshot]
  • [Snapshot]


A companion Demonstration, 'Financial Engineering of a Bond' illustrates the practical process that is undertaken before issuing a bond in order to make it as attractive as other bonds in the market (i.e. the net present value of the bond calculated with the yield to maturity of a comparable bond is zero). This Demonstration, however, focusses on the general characteristics that drive the net present value of a bond.
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.

Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-Step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2018 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+