Evaluation of the implied price of an attached warrant Dinoo Mathur wishes to determine whether the $$1,000$

price asked for Stanco Manufacturing's bond is fair in light of the theoretical value of the attached warrants. The

$$1,000-$par$-$value, $30-$year, $11\mathrm{.}4\%-$coupon$-$interest$-$rate bond pays annual interest and has $10$ warrants attached for

purchase of common stock. The intrinsic value of each warrant is $$12\mathrm{.}91.$ The interest rate on an equal$-$risk straight

bond is currently $12\mathrm{.}9\%.$

a$.$ Find the straight value of Stanco Manufacturing's bond.

b$.$ Calculate the implied price of all warrants attached to Stanco's bond.

c$.$ Calculate the implied price of each warrant attached to Stanco's bond.

d$.$ Compare the implied price for each warrant calculated in part $c$ to its intrinsic value. On the basis of

this comparison, what assessment would you give Dinoo with respect to the fairness of Stanco's bond price?

Explain.