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+ + + Intrinsic Value + C + + (Hic ang Complete the following table by identifying the appropriate corresponding variables used in the equation

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+ + + Intrinsic Value + C + + (Hic ang Complete the following table by identifying the appropriate corresponding variables used in the equation Unknown Variable Value $65.63 A Variable Name Bond's semiannual coupon payment Bond's par value Semiannual required return B $1,000 8.7500% Based on this equation and the data, it is reasonable ho to expect that Oliver's potential bond investment is currently exhibiting an intrinsie value less than $1,000 Now, consider the situation in which Oliver wants to earn a return of 6.75%, but the bond being considered for purchase offers a coupon rate of 8.75%. 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 (rounded to the nearest whole dollar) is its par value, so that the bond 15 Given your computation and condusions, which of the following statements is true? When the coupon rate is greater than Oliver's required return, the bond should trade at a discount. When the coupon rate is greater than Oliver's required return, the bond's intrinsic value will be less than its par value. When the coupon rate is greater than Oliver's required return, the bond should trade at a premium. O A bond should trade at a par when the coupon rate is greater than Oliver's required return For example, assume Oliver wants to earn a return of 10.50% and is offered the opportunity to purchase a $1,000 par value bond that pays a 8.7596 coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bond's intrinsic value

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