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Can you double check my answers please?! 2. Warrants Warrants are long-term options to buy a stated number of common shares at a specified price
Can you double check my answers please?!
2. Warrants Warrants are long-term options to buy a stated number of common shares at a specified price that is generally attached to debt issues. Warrants give bond investors the chance to profit from the firm's upside potential, leading some to compare warrants to a long-term call option. However, some factors distinguish warrants from call options. Which of the following statements about their differences is correct? O Exercising call options can lead to the dilution of existing shareholders' value. rcgrratsnharehs value. Triptych Food Corp. is issuing new 17-year bonds with 29 warrants attached to each $1,000 par value bond. Triptych Food Corp. wanted to issue the bonds at par, but a straight-debt bond (without warrants) would have required a 14.00% coupon rate. Instead, the attached warrants allow Triptych Food Corp. to issue the bonds at par with a 8.40% coupon. Calculate the straight value of the bond and the value of each warrant in the following table. (Note: Assume that the company pays annual coupons.) Value What is the straight value of the bond? What is the value of each warrantStep by Step Solution
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