c. Compare the unit issue with the straight subordinated debenture alternative in terms of cost to CWI and other features you consider relevant.

13.7 The Blindex Corp. is negotiating an 8-year subordinated loan with Good Ground Capital Partners as a first step toward going public the following year. It expects to close the transaction on November 30, 2007. Blindex’s investment banker proposes giving the lender 1 million 8-year warrants with a $15 exercise price in exchange for a lower coupon rate.

Specifically, Blindex needs to raise $19.9 million net of expenses. It can do so by issuing $20 million subordinated debentures with a 13% annual coupon or with an 11% coupon plus the warrants.