A)

A bond with 30 detachable warrants has just been offered for sale at $1,000. The bond matures in 20 years and has an annual coupon of $66. Each warrant gives the owner the right to purchase two shares of stock in the company at $56 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 9 percent.

What is the value of one warrant? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

B)

The following facts apply to a convertible bond making semiannual payments:

Conversion price	$	37	/share
Coupon rate		3.6	%
Par value	$	1,000
Yield on nonconvertible debentures of same quality		4	%
Maturity		10	years
Market price of stock	$	36	/share

What is the minimum price at which the convertible should sell? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

*PLZ ANSWER BOTH PARTS A &B **