📈 Yield to Call Calculator
Estimate the annualized return assuming the bond is called at the first call date.
Yield to Call (annual, %)
4.544%
How to Use This Calculator
Provide the bond’s current clean price, face value (par), annual coupon rate, years remaining until the first call date, and the call price. The tool assumes annual coupon payments and discounts all cash flows up to the call date, including the redemption at the call price. It then solves for the discount rate that equates the present value of those cash flows to the observed market price—the yield to call. Use YTC to evaluate callable bonds when the issuer is likely to exercise the call option (for example, when coupons are high relative to current market rates). If a bond is not likely to be called, yield to maturity may be a more relevant measure.
Formula
Price = sum t=1..T [ C / (1+y)^t ] + CP / (1+y)^T
Solve for y (YTC) such that the equality holds, where C = coupon, CP = call price, T = years to call.
About Yield to Call Calculator
Yield to call focuses on the cash flows an investor actually receives if the issuer exercises its call option at the first opportunity. Because callable bonds are typically called when it benefits the issuer, YTC can be a conservative way to compare income securities trading above par. This tool models annual coupons and a single call date to keep inputs simple and transparent. While real bonds may pay coupons semi‑annually and include multiple call schedules or step‑downs, the same idea applies—discount all payments only up to the assumed call date and solve for the internal rate of return. Use YTC alongside yield to worst and yield to maturity to get a complete picture of potential outcomes for callable bonds.
Frequently Asked Questions
How is YTC different from YTM?
Yield to maturity discounts all coupon payments until final maturity and assumes the bond is never called. Yield to call instead assumes redemption on the call date at the call price, often earlier than maturity. For bonds priced above par, YTC is typically lower than YTM because the investor realizes the premium over a shorter horizon.
What if coupons are paid semi‑annually?
The concept is the same, but discount periods are halved and the yield is quoted on a bond‑equivalent basis. This simple calculator uses annual periods for clarity. For more precision, convert inputs to a semi‑annual convention and solve for the periodic rate, then annualize appropriately.