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Implied prices of attached warrants Calculate the implied price of each warrant for each of the bonds shown in the following table. Bond Price of bond with warrants attached $1,000 1,100 500 1,000 A Coupon Interest rate interest rate on equal-risk Par value (paid annually) straight bond $1,000 12% 13% 1.000 9.5 12 500 10 11 1,000 11 12 Number Years to of warrants maturity attached to bond 15 10 10 30 20 5 B D 20 20 The straight value of bond A is $ (Round to the nearest cent.) The implied price of all warrants for bond A is $ (Round to the nearest cent.) The implied price of each warrant for bond A is (Round to the nearest cent.) The straight value of bond B is $ . (Round to the nearest cent.) The implied price of all warrants for bond B is $ (Round to the nearest cent.) The implied price of each warrant for bond B is $ (Round to the nearest cent.) The straight value of bond C is $. (Round to the nearest cent.) The implied price of all warrants for bond C is $. (Round to the nearest cent.) The implied price of each warrant for bond C is S (Round to the nearest cent.) The straight value of bond D is $ (Round to the nearest cent.) The implied price of all warrants for bond D is $ (Round to the nearest cent.) The implied price of each warrant for bond D is s (Round to the nearest cent.)

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