Question
Charles River Company has just sold a bond issue with 10 warrants attached. The bonds have 20-year maturity, an annual coupon rate of 12%, and
Charles River Company has just sold a bond issue with 10 warrants attached. The bonds have 20-year maturity, an annual coupon rate of 12%, and they are sold at their $1000 par. The yield on similar straight bonds is 15%. What is the implied value of each warrant?
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Introduction To Mathematical Finance Discrete Time Models
Authors: Stanley R. Pliska
1st Edition
1557869456, 9781557869456
