Confusion about Nominal Spread

Hi All, I am a little confused about the nominal spread. For example, when we calculate the price of a 10-year non-Treasury bond, is the discount rate used to compute the PV of each cash flow found by adding nominal spread to the YTM for a 10-year Treasury bond and then dividing by 2? Thank you!

nominal spread = yield on risky bond - yield on similar treasury bond so yes, your calculation would be correct. I should say it would be correct assuming you’re working with a semi-annual pay bond.

Yes, I am working with semi-annual bond. Thank you very much!