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Calculate the price of the bond

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Reference no: EM132997694

Question - The Bluestar company raised $1m through a 10-year bond issue on the 31st of December 2019. The bond pays 5% pa in coupons, with coupons paid quarterly. Calculate the price of the bond on the 8th of June 2021, given a market yield of 4.5%. In your answer, identify whether the bond is trading at a discount or a premium, and explain the logic why this is the case. Show all calculations.

Reference no: EM132997694

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