Calculate the current market price of the tls bond

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Reference no: EM133116399

Question - Consider the information contained in the following table on a particular bond issue for Telstra Limited (TLS).

ASX Code

YTMTL1

Face Value

$10,000

Issue Size

$500,000,000

Maturity Date

16 September 2022

Coupon Type

Fixed

Semi-Annual Coupon Rate

2.00% of Face Value

Payment Frequency

Semi-Annual



Remaining Coupon Payment Dates

16 March 2022


16 September 2022 (Maturity Date)



Yield to Maturity

4.5%

 Required -

1. Calculate the current market price of the TLS bond using the details reported in this table.

2. Explain why the price you have calculated is not equal to the face value.

Reference no: EM133116399

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