Thomson engineering is issuing new 10 year bonds that have 20 warrants attached. If not for the attached warrants the bonds would carry a 9% interest rate. However with the warrents attached the bonds will pay a 7 % annaual coupon and still sell for the face value of 1,000. What is the value of each warrant?
a. 6.42
b. 7.15
c. 8.29
d. 9.10