What is the implied value of each warrant

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Curran Contracting is issuing new 25-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% annual interest rate. However, with the warrants attached the bonds will pay an 8% annual coupon. There are 30 warrants attached to each bond, which have a par value of $1,000. What is the implied value of each warrant?

a. $8.42       

b. $9.75   

c. $9.28       

d. $8.00  

e. $8.84

Reference no: EM13811309

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