What is the value of each warrant

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Reference no: EM13885140

Thomson Engineering is issuing new 10-year bonds that have 20 warrants attached. If not for the attached warrants, the bonds would carry a 9% interest rate. However, with the warrants attached the bonds will pay a 7% annual coupon and still sell for the face value of $1,000. What is the value of each warrant?

a) $6.42 b) $7.15 c) $8.29 d) $9.10

Reference no: EM13885140

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