Multiple Choice
E) Thompson Utilities has issued a bond with 50 warrants attached. The bonds have a 20-year maturity and an annual coupon of 12%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 15%. What is the implied value of each warrant?
A) $3.76
B) $3.94
C) $4.14
D) $4.35
E) $4.56
Correct Answer:
Verified
Correct Answer:
Verified
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