Maese Industries Inc. has warrans outstanding that permit the holders to purchase 1 share of stock per warrant t a price of $25. Calculate the excersie value of the firm's warrants if the common sells at each of the following prices:(1) $20, (2) $25, (3) $30, (4) $100. (hint: A warrant's exercise value is the difference between the stock price and the purchase price specified by the warrant if the warrant were to be exercised.)

b) Assumes the firms stock now sells for $20/share. The company wants to sell some 20 year, $ 1000 par value bonds with interest paid annually. Each bond will have attached 50 warrants, each exerciable into 1 share of stock at an exercise price of $25. The firms straight bonds yield 12%.Assume that each warrant wil have a market value of $3 when the stock sells at $20. What coupon interest rate and dollar coupon , must the company set on the bonds with warranty if they are to clear the market?( Hint : The convertible bond should have an initial price of $1,000).

Please provide an expanantion to part b.

thanks