YTM Definition
The percentage rate of return on a bond if it is held to maturity. Calculation of YTM is:
YTM = ((Coupon + Net Change in Price) / Years to Maturity) / ((Purchase Price + Par Value) / 2 )
Or
YTM = I + [(FV – CV) / N] / (FV + CV) / 2
where
I = interest paid annually in dollars
FV = face value
CV = current value (price)
N = number of years until maturity