1. Randall and Arts Inc. is issuing new nine-year bonds with 21 warrants attached to each $1000 par value bond. Randall and Arts Inc. wanted to issue the bonds at par, but a straight-debt bond(without warrants) would have required a 11.80% coupon rate. Instead, the attached warrants allow Randall and Arts Inc. to issue the bonds at par with 7.08% coupon. Calculate the straight value of the bond and the value of each warrant in the following table.

	Value
What is the straigh value of the bond?	?????
What is the value of each warrant?	?????

2. Which kind of firm is more likely to issue bonds with attached warrants-large, mature firms or small, fast-growing firms? a. large, mature firms b. small, fast growing firms