How much is the value of the equity instrument

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Question - On May 1, 2020, GREEN Company issued 2,000,000, 5-year, 10% bonds for 2,300,000. Each 1,000 bond has two detachable warrant eligible for the purchase of one share of GREEN's 100 par ordinary share for 120. Without the warrants, the bonds are selling at a prevailing 9% rate of interest. The PV factor of annuity of 9% for 5 periods is 3.89; the PV factor of 9% on the 5th year is .65. How much is the value of the equity instrument or the detachable warrants? SHOW A DETAILED SOLUTION.

Reference no: EM132692052

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