Question: Plese help me . My answer are not corect. Intrinsic Value = A ( 1 + C ) 1 + A ( 1 + C
Plese help me My answer are not corect.
Intrinsic Value
Complete the following table by identifying the appropriate corresponding variables used in the equation.
Based on this equation and the data, it is unreasonable to expect that Oliver's potential bond investment is currently exhibiting an intrinsic
value greater than $
Now, consider the situation in which Oliver wants to earn a return of but the bond being considered for purchase offers a coupon rate of 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 what its par value, so that the bond is what?
Given your computation and conclusions, which of the following statements is true?
When the coupon rate is greater than Oliver's required return, the bond should trade at a premium.
When the coupon rate is greater than Oliver's required return, the bond should trade at a discount.
A bond should trade at a par when the coupon rate is greater than Oliver's required return.
When the coupon rate is greater than Oliver's required return, the bond's intrinsic value will be less than its par value.
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