Rubash Company recently issued two types of bonds. The first issue consistedof 20-year straight (no warrants attached) bonds with a 9% annual coupon. The secondissue consisted of 20-year bonds with a 6% annual coupon with warrants attached. Bothbonds were issued at par ($1,000). What is the value of the warrants that were attached tothe second issue?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter20: Hybrid Financing: Preferred Stock, Warrants, And Convertibles
Section: Chapter Questions
Problem 1P: Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 5% coupon paid annually...
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Rubash Company recently issued two types of bonds. The first issue consisted
of 20-year straight (no warrants attached) bonds with a 9% annual coupon. The second
issue consisted of 20-year bonds with a 6% annual coupon with warrants attached. Both
bonds were issued at par ($1,000). What is the value of the warrants that were attached to
the second issue?

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