holder's required return, the bond's intrinsic value will be less than its par value, and the bond will trade at a discount For example, a s e oi la wants to earn a return or i3.50% and is offered the opportunity to purchase a $1,000 par value bond that pays a 11.29% coupon rate (distributed semiannualy) 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 ecuation. 56.25 Bond's par value Semiannual required return $1,000 Based on this equation and the data, it is reasonable to expect less than $1,000. that Oivia's potential bond nvestment is curenty ealbiting an intrinsic value Now, consider the situation in which Olivia wants to earn a return of 14%, but the bond being considered for purchase offers a coupon rate of 11.25%. Again, assume that the bond pays sem annual 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 $934 (rounded to the nearest whole dollar) is less than its par value, so that the bond is trading at a discount Given your computation and conclusions, which of the following statements is true? O When the coupon rate is greater than Olivia's required return, the bond should trade at a premium. O When the coupon rate is greater than Olivia's required return, the bond's intrinsic value will be less than its par value. When the coupon rate is greater than Olivia's required return, the bond should trade at a discount. O A bond should trade at a par when the coupon rate is greater than Olivia's required return