## anonymous 5 years ago when valuing a callable bond, do i add the first year's payments to the value of the bond?

1. anonymous

what kind of model are you using?

2. anonymous

$P=\sum_{t=1}^{n*}C/(1+r)^{t}+M*/(1+r)^n$

3. anonymous

here n* is number of years untill the assumed call date and M* is call price. Hope this solves all your doubt. and yes first year`s payment (coupon) will be count.