Stanley Corporation is considering a five year $6,000,000 bank loan to finance service equipment. The loan has an interest rate of 10 percent and is amortized over five year with end of year payments. Stanley can also lease the equipment for an end of year payment of $1.790.000. What is the difference in the actual out-of-pocket cash flows between the two payments, that is, by how much (in thousands of dollars) does one payment exceed the other? a. $ 90.0 b. $125.5 c, $207.2 d. S251.0 e, $3168 which of the following statements about convertibles true? a. The coupon interest rate on convertibles is generally higher than on straight debt. b. New equity funds are raised by the issuer when convertibles are converted. c. Investors are willing to accept lower interest rates on convertibles on convertibles because they are less risky than straight debt. d. At issue, a convertible's conversion (exercise) price is often set equal to the current underlying stock price. e. None of the above statements is true. Shearson PLC's stock sells for $42 per share. The company wants to sell some 20-year, annual interest, $1,000 par value bonds. Each bond will have attached 75 warrants, each exercisable into one share of stock at an exercise price of $47 Shearson's straight bonds yield 10 percent. The warrants will have a market value of $2 each when the stock sells for $42. What coupon interest rate must the company set on the bonds-with-warrants if the bonds are to sell at par? a. 8.00% b. 8.24% c. 8.96% d. 9.25% e. 10.00%