What is the implied value of warrants attached to each bond

Assignment Help Financial Management

Reference no: EM131067582

Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually and warrants attached. These bonds are currently trading for $1,000. Neubert also has outstanding $1,000 par value 15-year straight debt with a 9% coupon paid annually, also trading for $1,000. What is the implied value of the warrants attached to each bond? Round your answer to the nearest cent.

Reference no: EM131067582

Questions Cloud

What profit margin must the firm achieve : Dante Co. wishes to maintain a growth rate of 12 percent a year, a debt–equity ratio of 1.8, and a dividend payout ratio of 15 percent. The ratio of total assets to sales is constant at .90. What profit margin must the firm achieve?

Calculate the image position : a). Calculate the image position. b). Calculate the image height. Type a positive value if the image is upright and a negative value if it is inverted.

Compute the risk-neutral probability : A stock price is currently $80. It is known that in 4 months it will be either $75 or $85. The risk-free interest rate is 5% per year with continuous compounding. Consider a 4-month European call option with a strike price of $80. Compute the risk-ne..

What is the realized rate of return after redeeming : Six years ago Ruby Carter invested $1,000 in a $1,000 par, 20year maturity, 9 percent annual coupon rate putable bond, which can be redeemed at $900 after 5 years. If the current required rate of return on similar bonds is 13 percent, should Ruby red..

What is the implied value of warrants attached to each bond : Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually and warrants attached. These bonds are currently trading for $1,000. Neubert also has outstanding $1,000 par value 15-year straight debt with a 9% coupo..

What would be the percentage return on the investment : Assume an investor purchases a 10-year, $1,000 bond with a coupon rate of 12 percent. The market rate almost immediately falls to 9 percent. What would be the percentage return on the investment if the buyer borrowed part of the funds with a 25 perce..

How far does the boat move : The group's total mass is 1638 kg , and the boat's mass is 1.2×104 kg. The entire party walks the 6.9 m distance from bow to stern. How far does the boat move? (d=?cm) Express your answer using two significant figures.

Mock budget showing your startup costs : You are the owner and most senior manager of a successful, independent American brewery. Having established your company and enjoyed this success, you have decided to expand to one of two foreign markets where beer is very popular: Provide a mock bud..

Compressor works between pressure limits : A two stage reciprocating air compressor works between pressure limits of 1 bar and 20 bar. The inlet temperature is 150C and the polytrophic index is 1.29. Inter cooling between stages reduce the air temperature back to 150C. Both stages have the..

User Account

All Pages