**Excel** is the most widely used tool for dealing with massive datasets. We can perform myriads of tasks of multiple dimensions in **Excel**. I will show you how to create a convertible bond pricing model in **Excel** in this article.

**Table of Contents**hide

## Download Practice Workbook

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## Introduction to Convertible Bond

A convertible bond pays fixed-income interest but can be converted into a set number of common stock shares. Conversion from the bond to stock occurs at set times during the bond’s life and therefore is usually at the bondholder’s discretion. It provides investors with hybrid security that includes features of a bond, such as interest payments, as well as the option to own the underlying stock.

## 4 Steps to Create Convertible Bond Pricing Model in Excel

This is the dataset for today’s article. We have a bond with a Face Value of **$1500**, a Coupon Rate of **5%**, Discounting Factor of **5%**. The bond will mature in **4 years**. I will show you how to do convertible bond pricing now.

### Step 1: Calculate Coupon Amount

The first step is to calculate the coupon amount. We will multiply the face value of the bond by the coupon rate to do so.

- Go to
**C10**and write down the following formula

`=$C$4*$C$5`

- Then, press
**ENTER**to get the output.

- Then, use the
**Fill Handle**to**AutoFill**up to**C13**.

**Read More:** **How to Calculate Price of a Semi Annual Coupon Bond in Excel (2 Ways)**

### Step 2: Measure Coupon and Principal

Now, I will add the coupon and the principal amount. The maturity is 4 years. So, I have written down the principal amount first.

- Then, go to
**E5**and write down the following formula

`=C10+D10`

- Then, press
**ENTER**to get the output.

- After that, use the
**Fill Handle**to**AutoFill**up to**E13**.

**Read More:** **Zero Coupon Bond Price Calculator Excel (5 Suitable Examples)**

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**How to Calculate Bond Price with Negative Yield in Excel (2 Easy Ways)****Calculate Clean Price of a Bond in Excel (3 Easy Ways)****How to Calculate Bond Payments in Excel (2 Easy Methods)****Calculate Bond Price from Yield in Excel (3 Easy Ways)****How to Make a Yield to Maturity Calculator in Excel**

### Step 3: Calculate Present Value of Bond

The next step is to calculate the present value of the bond. To do so,

- Go to
**F9**and write down the following formula

`=E10/(1+$C$6)^B10`

- Then, press
**ENTER**to get the output.

- After that, use the
**Fill Handle**to**AutoFill**up to**F13**.

**Read More:** **How to Calculate Face Value of a Bond in Excel (3 Easy Ways)**

### Step 4: Measure Bond Value

Finally, I will calculate the bond value. I will use **the SUM function** to do so.

- Go to
**F15**and write down the following formula

`=SUM(F10:F13)`

- Then, press
**ENTER**to get the output.

**Read More:** **How to Calculate Present Value of a Bond in Excel (3 Easy Ways)**

## Things to Remember

- Use
**absolute reference**to lock a cell.

## Conclusion

In this article, I have shown you how to create a convertible bond pricing model in **Excel** in this article. I hope it helps everyone. If you have any suggestions, ideas, or feedback, please feel free to comment below. Please visit **Exceldemy** for more useful articles like this.

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