The Pricing Model Of Corporate Bond

With the development of our economic and the financial market, the corporate bond as a kind of financial instrument is more and more important. Especially some companies dealing with the foundational industry, such as water and electricity, transportation, coal, iron and steel industry, take the corporate bond as the most important financing tool. How to price reasonable the corporate bond, is still a question. There is no right means. But the price determines the level of the market development.Now our national research article on the corporate bond have two kind .One is the discount model, the other is qualitative analysis on the default risk of the corporate bond. There is no the quantitative analysis on the default risk of the corporate bond. Whereas the default risk is significant in the pricing the corporate bond. So this article want to price of the corporate bond on the quantitative analysis on the default risk.The pricing of corporate bond is also the application of the financial asset pricingmethod ,including the theory the rate risk, the default risk and financial distress. The west pricing model of the corporate bond on these theory, the price of the corporate bond is the no-risk yield adding the overflow decided by the character of the issue body. There have some structure models like the Merton Model and the reduced form models. But these model have a good many parameters, and is hard to understand, and also cann't meet the requirement of our national market. So this article divide the value of the corporate bond into three parts , one yields needed by the rate risk, one yields needed by the default risk, the other yields needed by the unperfect market .We pricing the three part individually, and then adding all together.Contemporary this article analyze the reason why our national corporate bond market is underdevelopment and give some policy proposes.