A bond with 20 detachable warrants has just been offered


A bond with 20 detachable warrants has just been offered for sale at $1,000. The bond matures in 30 years and has an annual coupon of $66. Each warrant gives the owner the right to purchase two shares of stock in the company at $65 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 9 percent.

What is the value of one warrant? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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Financial Management: A bond with 20 detachable warrants has just been offered
Reference No:- TGS02610345

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