can any finance guys help me with bond pricing?

[Al Neri]

am i pricing this bond right?

8% annual coupon 30 YTM BBB Bond with an analyst predicting:

Yr Annualized yield
1 14%
2 12%
3 10%
4 9%
5 8%
6 8%
7 8%
8 8%
9 8%
10 8%
11 8%
12 8%
13 8%
14 8%
15 8%
16 8%
17 8%
18 8%
19 8%
20 8%
21 8%
22 8%
23 8%
24 8%
25 8%
26 8%
27 8%
28 8%
29 8%
30 8%


The price I got was 895.2678.

To get the price I just rolled the bonds back to year 5 and then rolled them back each year at the predicted rate by the analyst.

 

[SKC]

marked

 

[Al Neri]

 

[johnjbruin]

erm...
you need to lay out your cash flows properly.
Year 1-29 you will have cash flows of $80.
Year 30 you will have cash flows $1000 + $80.
Then discount these back to year 0.

 

[jaybert]

1 0.14 8 7.01754386
2 0.12 8 6.37755102
3 0.1 8 6.010518407
4 0.09 8 5.667401689
5 0.08 8 5.444665576
6 0.08 8 5.041357015
7 0.08 8 4.667923162
8 0.08 8 4.322151076
9 0.08 8 4.001991737
10 0.08 8 3.705547905
11 0.08 8 3.431062875
12 0.08 8 3.176910069
13 0.08 8 2.941583397
14 0.08 8 2.723688331
15 0.08 8 2.52193364
16 0.08 8 2.33512374
17 0.08 8 2.162151612
18 0.08 8 2.001992233
19 0.08 8 1.853696512
20 0.08 8 1.716385659
21 0.08 8 1.589245981
22 0.08 8 1.471524056
23 0.08 8 1.362522274
24 0.08 8 1.261594698
25 0.08 8 1.168143239
26 0.08 8 1.08161411
27 0.08 8 1.001494547
28 0.08 8 0.927309765
29 0.08 8 0.858620153
30 0.08 108 10.73275192

PRICE: 98.57600026

This makes sense that the price is < the face ($100), since at all points, the yield is greater or equal to the coupon rate, hence trading at a discount.