Calculate the market price of warrants

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Reference no: EM1359850

Sloane Corporation 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 $32). The price paid for 2,000, $1,000 bonds with the warrants attached was $205,000. The market price of the Sloane bonds without the warrants was $180,000, and the market price of the warrants without the bonds was $20,000. What amount should be allocated to the warrants?
a. $20,000
b. $20,500
c. $24,000
d. $25,000

Reference no: EM1359850

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