In: Finance
A bond with 20 detachable warrants has just been offered for sale at $1000. The bond matures in 15 years and has an annual coupon of $120. Each warrant gives the owner the right to purchase two shares of stock in the company at $17 per share. Ordinary bonds (with no warrants) of similar quality are priced to yield 18%. What is the value of one warrant?
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
As nothing was mentioned excel is used.
NEED HELP WITH FINANCIAL CALCULATOR, LET ME KNOW