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What is the implied value of each warrant

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Problem 1: Lombard Corp. just sold a bond with 25 warrants attached. The bonds have a 20-year maturity and an annual coupon of 9%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 10%. What is the implied value of each warrant?

a. $0.00

b. $1.50

c. $3.41

d. $3.63

e. None of the above

Reference no: EM132657559

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