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Unknown Variable Name Variable Value Bond's semiannual coupon payment $78.75 Bond's par value $1,000 Semiannual required return 4.5000% to expect that Oliver's potential bond investment
Unknown Variable Name Variable Value Bond's semiannual coupon payment $78.75 Bond's par value $1,000 Semiannual required return 4.5000% to expect that Oliver's potential bond investment is currently exhibiting an intrinsic Based on this equation and the data, it is unreasonable value greater than $1,000. Now, consider the situation in which Oliver wants to earn a return of 19%, but the bond being considered for purchase offers a coupon rate of 15.75%. 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 is $1,206 Given your computation and conclusions, which of $1,114 ng statements is true? When the coupon rate is greater than oli $928 ired return, the bond's intrinsic value will be less than its par value. When the coupon rate is greater than oli $742 Lired 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. O When the coupon rate is greater than Oliver's required return, the bond should trade at a discount
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