A bond with 30 detachable warrants has just been offered for sale at $1,000. The bond matures

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A bond with 30 detachable warrants has just been offered for sale at $1,000. The bond matures in 15 years and has an annual coupon of $110. Each warrant gives the owner the right to purchase two shares of stock in the company at $15 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 12 percent. What is the value of one warrant?

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Fundamentals Of Corporate Finance

ISBN: 9780072553079

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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