Implied value of the warrants


Gregg company recently issued two types of bonds. The first issued consisted of 20-year straight debt with an 8% coupon paid annually. The second issue consisted of 20-year bonds with a 6% coupon paid annually and attached warrants. Both issues sold at their $1000 par values. What is the implied value of the warrants attached to each bond?

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Finance Basics: Implied value of the warrants
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