Meta Corp. is considering the issuance of a bonds-with-warrants package. Investors require a 7% rate of return for the company's vanilla bonds, but Meta's bonds-with-warrants package consists of 5%, 10 year bonds and 15 warrants. The company plans to issue the package at par value.
Find the straight-debt value of the bonds attached to the bonds-with-warrants package. Find the intrinsic value of each warrant attached to the bonds-with-warrants package.