What is the value of one warrant

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Reference no: EM132815936

Problem 1: ABC Inc.'s has issued bonds with five detachable warrants for sale for $1,000. The bonds will mature in ten years and carry an annual coupon at 8.5%. Each warrant confers on the owner the right to purchase four shares of stock in the company at $15 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 7.2 percent. What is the value of one warrant?

Reference no: EM132815936

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