Calculate the implied price of each warrant for each of the bonds in the following table. Bond
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Calculate the implied price of each warrant for each of the bonds in the following table.
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Bond ABCD Price of bond with warrants attached $1,000 1,200 500 980 Par value $1,000 1,000 500 1,000 Coupon interest rate (paid annually) 12 % 10 8.5 11 Interest rate on equal-risk straight bond 12.5% 11 9.5 13 Years to maturity 20 15 10 20 Number of warrants attached to bond 10 25 5 3.5
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Related Book For
Principles Of Managerial Finance
ISBN: 9781292018201
14th Global Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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