How much cash will edusoft receive when warrant are exercise

Assignment Help Finance Basics

Reference no: EM133616990

Problem: Mr. Duncan has decided to eliminate preferred stock as one of the alternatives and focus on the others. EduSoft's investment banker estimates that EduSoft could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10%.Will the warrants bring in additional capital when exercised? If EduSoft issues 100,000 bond-with-warrant packages, how much cash will EduSoft receive when the warrants are exercised? How many shares of stock will be outstanding after the warrants are exercised?

Reference no: EM133616990

Questions Cloud

Should you do something : procurement travel cards for all his employees except Arnold, his only male employee, because he never travels for work. Arnold's work doesn't require travel.?

What is the true cost of building the new assembly line : Suppose company needs $18 million to build new assembly line. What is the true cost of building the new assembly line after taking flotation costs into account?

How would you solve the problem of disparities : How would you solve the problem of disparities in compensation for female partners in law firms and general counsel offices? I anticipate that you will use the

Did you know that xerox had pioneered research : Did you know that Xerox had pioneered research in personal computer technologies, Ethernet, medical scanning, and many more innovations that other companies

How much cash will edusoft receive when warrant are exercise : How much cash will EduSoft receive when the warrants are exercised? How many shares of stock will be outstanding after the warrants are exercised?

Present an analysis of switzerland : Present an analysis of Switzerland that emphasizes the advantages and disadvantages it faces as a global player.

Why do some believe that the international criminal court : Why do some believe that the International Criminal Court (ICC) has transcended the traditional notion of international law as "law among nations"?

What is your currency exposure : You are a European investor who is considering investments in Swiss stock. What is your currency exposure if you invest in diversified portfolio of Swiss stock?

Builds infrastructure and creates better jobs : Builds infrastructure and creates better jobs. Multinational corporations? don't want to harm communities in poor? countries; they want to help? them!

User Account

All Pages