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Vaughn Manufacturing offered detachable 5-year warrants to buy one share of common stock (par value $5) at $20 (at a time when the stock was
Vaughn Manufacturing offered detachable 5-year warrants to buy one share of common stock (par value $5) at $20 (at a time when the stock was selling for $30). The price paid for 900, $1,000 bonds with the warrants attached was $823000. The market price of the Vaughn bonds without the warrants was $727000, and the market price of the warrants without the bonds was $75200. What amount should be allocated to the warrants?
$93200
$97700
$77150
$75200
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