Intrinsic Value CUACJI + Cutc)2 + (1+C)3 + (1+Cja + (1+Cjs + A B (1+0)6 (1+0)6 + Complete the following table by identifying the appropriate corresponding variables used in the equation. Unknown Variable Name Bond's semiannual coupon payment Bond's par value Semiannual required return Variable value $70.00 $1,000 6.1250% B unreasonable Based on this equation and the data, it is less than $1,000 to expect that Liam's potential bond investment is currently exhibiting an intrinsic value Now, consider the situation in which Liam wants to earn a return of 12.00%, but the bond being considered for purchase offers a coupon rate of 14.00%. 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 Given your computation and conclusions, which of the following statements is true? when the coupon rate is greater than Liam's required return, the bond's intrinsic value will be less than its par value. A bond should trade at a par when the coupon rate is greater than Liam's required return. When the coupon rate is greater than Liam's required return, the bond should trade at a premium. when the coupon rate is greater than Liam's required return, the bond should trade at a discount. 000