In April 2007, Blood corporation issued 3,000,000 of 10% nonconvertible bonds at 102 that are due on March 31, 2013. Each 1000 bond was issued with 40 detachable stock warrants, each of which entitled the bondholders to purchase one share of Blood 10 par ordinary share for 25. On April 1, 2007, the market value of the bonds ex-warrant was 97. What is the assigned value of the ordinary stock warrants?

In April 2007, Blood corporation issued 3,000,000 of 10% nonconvertible bonds at 102 that are due on March 31, 2013. Each 1000 bond was issued with 40 detachable stock warrants, each of which entitled the bondholders to purchase one share of Blood 10 par ordinary share for 25. On April 1, 2007, the market value of the bonds ex-warrant was 97. What is the assigned value of the ordinary stock warrants?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 5P

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