Thomson engineering is issuing new 20-year bonds that have


Thomson Engineering is issuing new 20-year bonds that have warrants attached. If not for the attached warrants, the bonds would carry an 11% annual interest rate. However, with the warrants attached the bonds will pay an 8% annual coupon. There are 30 warrants attached to each bond, which have a par value of $1,000. What is the value of the straight-debt portion of the bonds?

$652.55

$686.89

$723.05

$761.10

$799.16

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Financial Management: Thomson engineering is issuing new 20-year bonds that have
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