On May 1, 2020, E Co. issued P4,000,000 of its 10% non-convertible bonds at 106, due March 31, 2027. Each P2,000 bond was issued with 40 non-detachable share warrants, each entitles the holder to purchase two ordinary shares of E Co., par value P25 for P50 per share. If sold without the warrants, the bonds would yield 12%. The interest on the bonds is payable annually beginning March 31, 2021. The present value factors are as follows: Present Value factor of P1 lump-sum using 12% for 7 periods is 0.4523.Present Value factor of P1 ordinary annuity using 12% for 7 periods is 4.5638

What is the initial valuation of the equity component on issue date? Show your solution.