A bond with 20 detachable warrants has just been offered, Ask an Expert

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A bond with 20 detachable warrants has just been offered for sale at $1,000. The bond matures in 25 years and has an annual coupon of $48. Each warrant gives the owner the right to purchase two shares of stock in the company at $45 per share. Ordinary bonds(with no warrants)of similar quality are priced to yield 6%. What is the value of one warrant?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91941259

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