Question
Neubert enterprises recently issued $1000 par value 15-year bonds with a 5% coupon paid annually and warrants attached. These bonds are currently trading for $1000.
Neubert enterprises recently issued $1000 par value 15-year bonds with a 5% coupon paid annually and warrants attached. These bonds are currently trading for $1000. Neubert also has outstanding $1000 par value 15-year straight debt with a 7% coupon paid annually, also trading for $1000. What is the implied value of the warrants attached to each bond?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
16th Edition
013749601X, 978-0137496013
