Its very confusing. My spreadsheet gives 3.46% using the MS Excel Yield function which does not make sense to me. If I use XIRR it returns 5.38% both ignoring dealing and stamp duty, I think this is the more accurate as it takes account of the precise timing of cashflows. My crude manual calculations always align more closely with the later.

I'm just wondering if the Excel YTM formula is taking account of the accrued interest which would have to be paid for if this was a bond and that effects the YTM value? BBYB is a pref so there is no accrued.

The Yield Calculator on this site gives a YTM of 3.47% using a price of 109p

I've tried doing it manually and come up with annual YTM figure lower than 3.46%.

But I'm satisfied that the IRR is correct at more than 5% and am happy with that.

Come on - surely there is a mathematician out there that can give us the definative way to calculate the YTM on a pref.

I just used the XIRR function in Open Office - but I assumed that the price I paid includes any accrued (which I think in a perfect world is correct ), and added stamp duty and dealing cost to that

I also usually do a ball park check by working out the effective percentage annual loss due to the capital loss and subtracting this from the yield - which I think is similar to what Beekey does.

So in this case, a capital "loss" of roughly 8% over approx 1.25 years is 5.3%.

Just seen this. I could relate to both figures. I used the calculator on this site and it produced 3.45%. Thought this was a bit low so did rough calculation on a purchase of £5,000 nominal @ 109, all up cost £5,450. Interest comes to £806.25 less the capital loss of £450 gave £356.25 net over about 15 months so about £285 p.a. on £5,450 gave 5.23%. One year fixed can earn about 2% so I was happy with 3.45% for 15 months and even happier if it is 5% plus. Long while since I have done this sort of calculation but hopefully it is close enough. Think the outlook on BB for 15 months is all acceptable. Thank you Wozzit, thank you Laughton.

## Comments

Is that a straight yield ignoring time? So, 5.26% for the remaining 1.28 years rather than an annual yield?

The Yield Calculator on this site gives a YTM of 3.47% using a price of 109p

I've tried doing it manually and come up with annual YTM figure lower than 3.46%.

But I'm satisfied that the IRR is correct at more than 5% and am happy with that.

Come on - surely there is a mathematician out there that can give us the definative way to calculate the YTM on a pref.

I just used the XIRR function in Open Office - but I assumed that the price I paid includes any accrued (which I think in a perfect world is correct ), and added stamp duty and dealing cost to that

I also usually do a ball park check by working out the effective percentage annual loss due to the capital loss and subtracting this from the yield - which I think is similar to what Beekey does.

So in this case, a capital "loss" of roughly 8% over approx 1.25 years is 5.3%.

Running yield is 10.375% - approx YTM 5%