Perpetual Bond Valuation with Formula and Example

On this web page we look at the definition of perpetual bonds, and formula for valuation of perpetual bond illustrated with an example. Stop wasting time with clumsy templates - we bet, here you will find all you need!

I have been using MS Excel templates to do my financial analysis, Now I do all my analysis with FinEasy tools as they are unique and easy to use. FinEasy gets me the solution when I need it most - Hans K. ( EuroNext )

How much time did you waste with handheld calculator?

Using the toy like handheld financial calculators to do financial analysis makes it look more like key punching with high margin of error

Our competition on the web sell anything from buggy MS Excel templates to online bonds calculators for which they charge a fee and ask for registration. What you get is constant email reminders from them or sale of your personal information to marketing companies

Buy this Bond Valuation calculator to get the instant financial analysis tool that beats its competition with price of $5.

We been using MS Excel and proprietary software to analyze offering new bonds to investors, I must say FinEasy makes it darn easy for us to find the price that meets needs of both issuers and buyers - Dan S. ( U.S. Financial Regulatory Authority )

Bond Valuation Calculator

Secure online ordering

15 day money back guarantee

Single License Personal/Business: $99

How do you define a Perpetual Bond?

Perpetual Bond is a unique class of bonds that never matures. These are indeed rare but they help illustrate the valuation technique in its simplest form. The present value of the perpetual bond would simply be equal to the capitalized value of an infinite stream if interest payments. If a bond promises a fixed annual payment INT forever, its present value V at the investor's required rate of return for this debt issue is K_d.

What is the formula for Valuation of Perpetual Bond?

Perpetual Bonds Valuation Formula

Thus the present value of a perpetual bond is simply the periodic interest payment divided by the appropriate discount rate per period. Suppose you could buy a bond that paid $75 a year forever. Assuming that your required rate of return for this type of bond is 10%, then the present value of this security would be

V=$75/0.10=$750.00

Perpetual Bond | Non Zero Coupon Bond | Zero Coupon Bond | YTM