ABC Company recently issued two types of bonds. The first issue consisted of 20-year
QUESTION
ABC Company recently issued two types of bonds. The first issue consisted of 20-year straight debt with an 8 percent annual coupon. The second issue consisted of 20-year bonds with a 6 percent annual coupon and attached warrants. Both issues sold at their $1,000 par values. What is the implied value of the warrants attached to each bond?
ANSWER:
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