Rubash Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants

Question:

Rubash Company recently issued two types of bonds. The first issue consisted of 20-year straight (no warrants attached) bonds with a 9% annual coupon. The second issue consisted of 20-year bonds with a 6% annual coupon with warrants attached. Both bonds were issued at par ($1,000). What is the value of the warrants that were attached to the second issue?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...

Fantastic news! We've Found the answer you've been seeking!