What is the value of warrant

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Reference no: EM13969774

Thomson engineering is issuing new 10 year bonds that have 20 warrants attached. If not for the attached warrants the bonds would carry a 9% interest rate. However with the warrents attached the bonds will pay a 7 % annaual coupon and still sell for the face value of 1,000. What is the value of each warrant?

a. 6.42

b. 7.15

c. 8.29

d. 9.10

Reference no: EM13969774

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