Shearson PLC's stock sells for $42 per share. The company wants to sell some 15-year, annual interest, $1,000 par value bonds. Each bond will have attached 66 warrants, each exercisable into one share of stock at an exercise price of $47. Shearson's straight bonds yield 11 percent. The warrants will have a market value of $2.50 each when the stock sells for $42. What is the current value of the warrants attached to each bond? Question 18 options: $165 $105 $27.5 $117.5

Shearson PLC's stock sells for $42 per share. The company wants to sell some 15-year, annual interest, $1,000 par value bonds. Each bond will have attached 66 warrants, each exercisable into one share of stock at an exercise price of $47. Shearson's straight bonds yield 11 percent. The warrants will have a market value of $2.50 each when the stock sells for $42. What is the current value of each bond?

Question 19 options:

	$972.5
	$895
	$835
	$882.5

Shearson PLC's stock sells for $42 per share. The company wants to sell some 15-year, annual interest, $1,000 par value bonds. Each bond will have attached 66 warrants, each exercisable into one share of stock at an exercise price of $47. Shearson's straight bonds yield 11 percent. The warrants will have a market value of $2.50 each when the stock sells for $42. The company sets the coupon rate on the bonds such that the bonds-with-warrants sell at par. What is the annual coupon payment?

Question 20 options:

	$95.40
	$93.66
	$87.05
	$106.18