The process of bond valuation is based on the fundamental concept that the current price of a security can be determined by calculating the present

value of its future cash flows.

A bond's coupon rate determines the interest$-$based return that a bond will $>$ pay, and a bondholder's required rate of return reflects the return

that a bondholder

receive from the investment.

Bond valuation implies a relationship between the bondholder's required rate of return, the bond's coupon rate, and the bond's par value. These

relationships can be summarized as follows:

Relationships

When the bond's coupon rate is equal to the bondholder's required return, the bond will

trade at

When the bond's coupon rate is greater than the bondholder's required return, the bond

will trade at

When the bond's coupon rate is less than the bondholder's required return, the bond will

trade at

Suppose S

earn a return of $12\mathrm{.}00$ percent and is offered the opportunity to purchase a $$1,000$ par value bond that pays a $14\mathrm{.}00$ percent

coupon rat

a premium

semiannually$)$ and has three years remaining to maturity.

help please