The mathematics of bond valuation imply a predictable relationship between the band's coupon rate, the bondholder's required return, the bond's par value, and its intrinsic value. These relationships can be summarized as follows: exceed its par value, and . When the band's coupon rate is equal to the bondholder's required retum, the bond's Intrinsic value will equal its par value and the bond will trade at par. . When the band's coupon rate is greater than the bondholder's required return, the band's intrinsic value will the bond will trade at a premium . When the band's coupon rate is less than the bondholder's required return, the band's intrinsic value will be less than its par value, and the band will trade at a premlum - Assume Amelia wants to eam a return of 7.00% and is offered the opportunity to purchase a $1,000 par value band that pays a 7.00% coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bond's intrinsic value: Intrinsic Value - + + + + + + + + wacht to 01-0 Complete the following table by identifying the appropriate corresponding variables used in the equation Unknown Variable Name Variable Value A 8 $1,000 Semiannual required retum Based on this equation and the data, it is to expect that Amelia's potential bond investment will exhibit an intrinsic value equal to The mathematics of bond valuation imply a predictable relationship between the band's coupon rate, the bondholder's required return, the bond's par value, and its intrinsic value. These relationships can be summarized as follows: exceed its par value, and . When the band's coupon rate is equal to the bondholder's required retum, the bond's Intrinsic value will equal its par value and the bond will trade at par. . When the band's coupon rate is greater than the bondholder's required return, the band's intrinsic value will the bond will trade at a premium . When the band's coupon rate is less than the bondholder's required return, the band's intrinsic value will be less than its par value, and the band will trade at a premlum - Assume Amelia wants to eam a return of 7.00% and is offered the opportunity to purchase a $1,000 par value band that pays a 7.00% coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the bond's intrinsic value: Intrinsic Value - + + + + + + + + wacht to 01-0 Complete the following table by identifying the appropriate corresponding variables used in the equation Unknown Variable Name Variable Value A 8 $1,000 Semiannual required retum Based on this equation and the data, it is to expect that Amelia's potential bond investment will exhibit an intrinsic value equal to
