Say you buy a bond that currently costs $950, and matures in one year, at $1000 face value. It has one coupon ($50 interest payment) left. The coupon, $50, is The value of a bond is equal to the present value of its coupon payments plus the present The higher the discount rate, the lower a cash flow's present value and For a given change in yield, the price increases by more than it decreases. 27 Mar 2019 Internal rate of return (IRR) and yield to maturity are calculations used by companies to In other words, because we bought the bond for a discount, our effective YTM is slightly higher than the bond's coupon interest rate.