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A warrant is attached to a $1,000 par, 10 percent, 10-year bond, paying annual interest and having 20 warrants attached for the purchase of a firm's stock. The bonds were initially sold for $1,200. When issued, similar risk, straight bonds were selling at a 14 percent rate of return. The implied price of the warrant is ________.

A) $10.40

B) $20.40

C) $10.00

D) $20.00

Answer: B