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What does 'Dirty Price' mean
A bond pricing quote referring to the price of a coupon bond that includes the present value of all future cash flows, including interest accruing on the next coupon payment . The dirty price is how the bond is quoted in most European markets, and is the price an investor will pay to acquire the bond.
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BREAKING DOWN 'Dirty Price'
Accrued interest is earned when a coupon bond is currently in between coupon payment dates. As the next coupon payment date approaches, the accrued interest increases until the coupon is paid. Immediately following the coupon payment, the clean price and dirty price will be equal.
The dirty price is sometimes called the "price plus accrued". The clean price is quoted more often in the United States.
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