Yield to Call Calculator is an online tool for investment calculation, programmed to estimate the expected investment return on callable bond. This calculator generates the output value of YTC in percentage according to the input values of the type of investment, Bond face value, Bond price, Coupon rate, years to maturity, Call price and Years to call.
The term Yield to Call is often abbreviated as YTC, defined that the bond is called on the next eligible call date. The yield is calculated from the cash flows from the coupon payments plus the cash flow of the redemption proceeds at the time of the call. Where the coupon payment refers to the total interest per year on a bond. Yield to call can be mathematically derived and calculated from the formula.
When it comes to helping you estimate your return on a callable bond, yield to maturity has a flaw. If the bond is called, the par value will be repaid and interest payments will come to an end, thus reducing its overall yield to the investor. Therefore, for a callable bond, you also need to know what the yield would be if the bond were called at the earliest date possible. That figure is known as its yield to call. The calculation is the same as with yield to maturity, except that the first call date is substituted for the maturity date. YTC is therefore a good measurement gauge for the expected investment return of a bond at a callable time. When it comes to online calculation, this Yield to Call calculator can help you to determine the expected investment return of a bond according to the respective input values.