28,000 $1000 bonds with a stated rate of 2.5% and interest payments due semi-annually to be issued with ten detachable warrants each. The debt matures in 10 years. The bonds without the warrants would issue at face value. The bonds with the detachable warrants are expeced to issue at a price of $30,350,000 and the underwriter's is expected to charge $350,000 to take the issue to market. The exercise price for each warrant is $13.

The company is a non-dividend paying firm (i.e., neither common nor preferred stockholders are paid a dividend). There are 2 million shares of common stock outstanding, this balance is expected to remain consistent over the next years without considering the issuance at hand. Earnings before interest, issue expenses, and taxes is $12 million with an expected increase of 5% year over year. The stock price is $11 per share and is expected to increase 4% year over year. The tax rate for all years is 21%.

Solve for present value?

What is Basic ESP?

What is Diluted ESP?