Multiple Choice
A bond with five detachable warrants has just been offered for sale for $1,000. The bond matures in eight years and has an annual coupon of $60. Each warrant grants its owner the right to purchase two shares of stock in the company at $15 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 6.4 percent. What is the value of one warrant?
A) $2.45
B) $5.67
C) $12.25
D) $24.45
E) $4.89
Correct Answer:
Verified
Correct Answer:
Verified
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