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Cure Corporation offered detachable 10-year warrants to buy six shares of common stock (par value $1) at $30 (at a time when the stock was
Cure Corporation offered detachable 10-year warrants to buy six shares of common stock (par value $1) at $30 (at a time when the stock was selling for $35). The price paid for 500, $1,000 bonds with the warrants attached was $660,000. The market price of the Cure bonds without the warrants was $540,000, and the market price of the warrants without the bonds was $90,000. What amount should be allocated to the bond premium or discount? Discount of $65,714 Premium of $65,714 Premium of $40,000 Discount of $40,000
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