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What should be the annual coupon rate

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Reference no: EM131317315

Target wants to sell some 25-year, $1,000 par value bonds with coupon interest paid annually. Each bond has 45 warrants attached to it. The yield of the firm's bonds with no warrants is 16%. The market value of each warrant is $3.00. If Target wants to sell the bonds with warrant at par, what should be the annual coupon rate?

  • 11.72%
  • 12.68%
  • 13.79%
  • 14.88%
  • 15.17%
  • No enough information

Reference no: EM131317315

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