A bond with 15 detachable warrants has just been offered for sale at $1,000. The bond matures in 15 years and has an annual coupon of $120. Each warrant gives the owner the right to purchase two shares of stock in the company at $15 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 18 percent. What is the value of one warrant?

Multiple Choice

$20.37

$46.30

$24.44

$18.33

$22.40