Value of straight-debt, Thomson Engineering is issuing new

Value of straight-debt

Reference no: EM1334112

Thomson Engineering is issuing new 30-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% annual interest rate. However, with the warrants attached the bonds will pay an 8% annual coupon. There are 30 warrants attached to each bond, which have a par value of $1,000. What is the value of the straight-debt portion of the bonds?

Reference no: EM1334112

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Value of straight-debt : Thomson Engineering is issuing new 30-year bonds that have warrants attached. Which have a par value of $1,000. What is the value of the straight-debt portion of the bonds?

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