1 23456 Rowdy Reptiles is issuing new 15-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 12% annual interest rate. However, with the warrants attached the bonds will pay a 8% annual coupon. There are 25 warrants attached to each bond, which have a par value of $1,000. What is the value of each warrant? 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 years to maturity coupon rate PMT YTM par value bond value without warrants number of warrants implied value of warrants implied value per warrant 34 35 36 38 39 40 41 42 43 22222222222333333333327 2 2 : 24 25 26 28 29 30 31 ^^ 15 8.00%