What is value of warrants that were attached to second issue

Assignment Help Financial Management

Reference no: EM131299996

Gregg Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with an 5% annual coupon. The second issue consisted of 20-year bonds with a 4% annual coupon with warrants attached. Both bonds were issued at par ($1,500). What is the value of the warrants that were attached to the second issue? Round your answer to the nearest cent.

Reference no: EM131299996

Questions Cloud

What is the annuitys future value : An annuity of $1,000 per year has 10 annual cash flows, with the first one being today. At an interest rate of 15% annually, what is the annuity’s future value?

Measuring and evaluating healthcare quality : Measuring and Evaluating Healthcare Quality. What are the major challenges to using outcomes as a basis for assessing quality? How can Quality-Adjusted Life Years (QALY) be used to inform health policy? Should Quality-Adjusted Life Years (QALY) be a ..

What is per-share value of van buren to harrison corporation : Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 6%, and the market risk premium is 7%. Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $1.58 a..

What is value of warrants that were attached to second issue : Gregg Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with an 5% annual coupon. The second issue consisted of 20-year bonds with a 4% annual coupon with warrants attached. What is..

Firms should adopt positive npv projects : As the text notes, firms should adopt positive NPV projects, and reject negative NPV projects. But what if a project has a $0 NPV? Should they accept the project or reject it? Explain.

Required additional manufacturing capacity : Two textile companies, McDaniel-Edwards Manufacturing and Jordan-Hocking Mills, began operations with identical balance sheets. A year later both required additional manufacturing capacity at a cost of $200,000. Show the balance sheet of each firm af..

What is the npv of the project and should you pursue project : A business opportunity has presented itself to you and one of your classmates. Your opportunity is to enter the fast growing craft beer industry. Your projected sales in the first year is 7500 kegs. The tax rate is 34 percent and the required return ..

Should the preferred stock include a call provision : In the summer of 2015, the Hadaway Company was planing to finance an expansion with a convertible security. It considered a convertible debenture but feared the burden of fixed interest charges if the common stock price did not rise enough to make co..

User Account

All Pages