For example, assume Ethan wants to earn a return of 15.75% and is offered the opportunity to purchase a $1,000 par value bond that pays a 13.50% coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bond's intrinsic value: Complete the following table by identifying the appropriate corresponding variables used in the equation Unknown Variable Name Variable Value $1,000 Semiannual required return Based on this equation and the data, it is greater than $1,000 to expect that Ethan's potential bond investment is currently exhibiting an intrinsic value Now, consider the situation in which Ethan wants to earn a return of 11.50%, but the bond being considered for purchase offers a coupon rate of 13.50%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of $1,365 (rounded to the nearest whole dollar) is bond is its par value, so that the Given your computation and conclusions, which of the following statements is true? O A bond should trade at a par when the coupon rate is greater than Ethan's required return 0 when the coupon rate is greater than Ethan's required return, the bond's intrinsic value will be less than its par value. when the coupon rate is greater than Ethan's required return, the bond should trade at a premium when the coupon rate is greater than Ethan's required return, the bond should trade at a discount