Given the following case, answer questions 23 to 25 below: Peter Krone is the cluef financial officer (CFO) of Echo Inc. The firm was founded seven years ago to provide educational services for the rapidly expanding primary and secondary school markets. Although Echo Inc. has done well, the firm's founder believes that an industry shakeout is imminent. To survive, Echo 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. Krone 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. Krone estimates that Echo Inc. could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10% nal Assessment E Final Assessment X + d/e/1FAIpQLSewr40_01H36vvhNO75e1FxrXho ROKOZzb8IjByf_USNUpSA/form Response 23. What coupon rate should be set on the bond with warrants if the total package is to sell for $1,000? * 6.96% 7.80% O O O O O 8.41% 9.62% None of the above 24. If Echo Inc. issues 100,000 bond-with-warrant packages, how much cash will Echo Inc. receive when the warrants are exercised? * $25.9 million $48.6 million $52.3 million $67.5 million None of the above to to 15 + Final Assessment x Final Assessment X + gle.com/forms/d/e/1FAIpQLSewr4U_01H36whNo 75e1FxriXhoROK6ZzboljByf_USNUpSA/formResponse 0 $48.6 millon $52.3 million $67.5 million None of the above 25. How many shares of stock will be outstanding after the warrants are exercised? (Echo Inc. currently has 20 million shares outstanding). 0 28.7 million shares 25.7 million shares 22.7 million shares 29.8 million shares None of the above 17:32 0 Peter Krone is the chief financial officer (CFO) of Echo Inc. The firm was founded seven years ago to provide educational services for the rapidly expanding primary and secondary school markets. Although Echo Inc. has done well, the firm's founder believes that an industry shakeout is imminent. To survive, Echo 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. Krone 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. Krone estimates that Echo Inc. could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10%. Given the following case, answer questions 23 to 25 below: Peter Krone is the cluef financial officer (CFO) of Echo Inc. The firm was founded seven years ago to provide educational services for the rapidly expanding primary and secondary school markets. Although Echo Inc. has done well, the firm's founder believes that an industry shakeout is imminent. To survive, Echo 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. Krone 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. Krone estimates that Echo Inc. could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10% nal Assessment E Final Assessment X + d/e/1FAIpQLSewr40_01H36vvhNO75e1FxrXho ROKOZzb8IjByf_USNUpSA/form Response 23. What coupon rate should be set on the bond with warrants if the total package is to sell for $1,000? * 6.96% 7.80% O O O O O 8.41% 9.62% None of the above 24. If Echo Inc. issues 100,000 bond-with-warrant packages, how much cash will Echo Inc. receive when the warrants are exercised? * $25.9 million $48.6 million $52.3 million $67.5 million None of the above to to 15 + Final Assessment x Final Assessment X + gle.com/forms/d/e/1FAIpQLSewr4U_01H36whNo 75e1FxriXhoROK6ZzboljByf_USNUpSA/formResponse 0 $48.6 millon $52.3 million $67.5 million None of the above 25. How many shares of stock will be outstanding after the warrants are exercised? (Echo Inc. currently has 20 million shares outstanding). 0 28.7 million shares 25.7 million shares 22.7 million shares 29.8 million shares None of the above 17:32 0 Peter Krone is the chief financial officer (CFO) of Echo Inc. The firm was founded seven years ago to provide educational services for the rapidly expanding primary and secondary school markets. Although Echo Inc. has done well, the firm's founder believes that an industry shakeout is imminent. To survive, Echo 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. Krone 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. Krone estimates that Echo Inc. could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10%