CFI-Excel-eBook

The Corporate Finance Institute Excel
Few things to remember about the YIELD Function:
1. #NUM! error – Occurs when:
• The settlement date provided is greater than or equal to the
maturity date.
• We provided invalid numbers for the rate, pr, redemption,
frequency or [basis] arguments. That is, we provided rate < 0; pr ≤
0; redemption ≤ 0; frequency is any number other than 1, 2 or 4; or
[basis] is any number other than 0, 1, 2, 3 or 4.
2. #VALUE! error – Occurs when:
• Any of the arguments provided is non-numeric.
• The settlement and maturity dates provided are not valid dates.
3. The result from the Excel RATE function appears to be the value 0 or
appears as a percentage but shows no decimal places. The problem is
often due to the formatting of the cell containing the function. If this is the
case, fix the problem by formatting the cell to show a percentage with
decimal places.
4. The settlement date is the date a buyer purchases a coupon, such as a
bond. The maturity date is the date when a coupon expires. For example, a
30-year bond is issued on January 1, 2010 and is purchased by a buyer six
months later. The issue date would be January 1, 2010, the settlement date
would be July 1, 2010, and the maturity date would be January 1, 2040,
which is 30 years after the January 1, 2010 issue date.
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