Multiple Choice
Thomson Engineering is issuing new 19-year bonds that have warrants attached.If not for the attached warrants,the bonds would carry a 12.3% annual interest rate.However,with the warrants attached the bonds will pay an 8.2% annual coupon.There are 30 warrants attached to each bond,which have a par value of $1,000.What is the value of the straight-debt portion of the bonds? Do not round your intermediate calculations.
A) $738.62
B) $773.80
C) $668.28
D) $703.45
E) $844.14
Correct Answer:
Verified
Correct Answer:
Verified
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