Given the following case, answer questions 15 to 17 below: Nicolas Lahm is the chief financial officer (CFO) of Lapard Inc. The firm was founded eight years ago to provide business consulting services. Although Lapard Inc. has done well, the firm's founder believes that an industry shakeout is imminent. To survive, Lapard Inc. must grab market share now, and this will require a large infusion of new capital. Because he expects earnings to continue rising sharply and looks for the stock price to follow suit, Mr. Lahm does not think it would be wise to issue new common stock at this time. On the other hand, interest rates are currently high by historical standards, the interest payments on a new debt issue would be prohibitive. Thus, he has chosen to finance the needed capital using bonds with warrants. Mr. Lahm estimates that Lapard Inc. could issue a bond-with-warrants package consisting of a 30-year bond and 35 warrants. Each warrant would have a strike price of $20 and 15 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $8. The coupon on a similar bond but without warrants would be 12%. 15. What coupon rate should be set on the bond with warrants if the total package is to sell for $1,000? * 6.74% 7.88% O 8.52% 9.24% O None of the above 16. If Lapard Inc. issues 120,000 bond- with-warrant packages, how much cash will Lapard Inc. receive when the warrants are exercised? * $24 million $39 million O $52 million $74 million None of the above 17. How many shares of stock will be outstanding after the warrants are exercised? (Lapard Inc. currently has 10 million shares outstanding). * O 10.52 million shares 12.42 million shares 14.20 million shares O 16.20 million shares None of the above