Homework Answers
Answer : $2.52
Calculation :
Ordinary bond current value = pv(rate,nper,pmt,fv)
= pv(8%,10,65,1000)
= $ 899.35
Current value of bind (with warrent)= 1000
Warrant value = Current Value of Bond with warrant - Ordinary bond current value
Warrant value = 1000 - 899.35
Warrant value = $ 100.65
No of Warrant with a bond = 40
Value of one warrant = Warrant value /No of Warrant with a bond
Value of one warrant = 100.65/40
Value of one warrant = $ 2.51625 or $2.52
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