Yield is always calculated as the discount rate that makes the present value of the coupons and final redemption equal to the market price. (If you aren't familiar with the concepts of discounting and present value, that's the first place to start) As the market price goes down, the cash flows are fixed, and must be discounted at a higher rate to get the present value down to the market price. The actual calculation for a bond with 11 coupons remaining is too long to show here (and must be solved iteratively anyway) but it can easily be done in excel with the XIRR function (which is the same concept mathematically). There are plenty of tutorials online to calculate Yield to Maturity (YTM).
A simple example with just two coupons - one in 6 months and one in 12 months (at final redemption):
c = coupon rate
y = yield
pv = (c/2)*(1+y/2)^(-1) + (c/2)*(1+y/2)^(-2) + (100)*(1+y/2)^(-2)
|----------------| |----------------| |----------------|
first coupon second coupon face value
The first coupon is discounted by 6 months (
y/2 or one period), the second and the face value are discounted by 12 months (
y/2 for 2 periods). Find the value of
y that makes the present value match the market price.
Excel's IRR and XIRR do the same thing, except the market price is treated as a cash outflow at the beginning. Excel does it iteratively by trying different values of
y until the retsult (effectively
PV - market price) is 0,
What you are calculating is the current yield, which is how much return do you get on your investment just from the next coupon. The yield to maturity is a more complicated calculation, and is an annualized return. You would get closer to that annualized yield if you doubled the current yield since coupons are paid twice a year.