When a bond's required return is greater than its coupon interest rate, the bond value will be less than its par value.

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When a bond's required return is greater than its coupon interest rate, the bond is said to be trading at a discount, which means that it is worth less than its par value. This is because investors will only be willing to pay a lower price for the bond in order to achieve the higher required return.

When a Bond's Required Return Is Greater Than Its Coupon