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Calculate the current price of the bond

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Reference no: EM133123075

Question - Use the information below for a bond issued by State Corporation.

10-year bond with annual coupon of 6%; bond issued on January 1, 2021 and matures on December 31, 2030. Coupon payments paid on each December 31.

Assume it is now January 1, 2027. In the secondary market, investors are now demanding a 5% return for the risk associated with this bond. Calculate the current price of the bond for State Corporation.

Is the bond trading at a discount, a premium or at par?

Reference no: EM133123075

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