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Neubert Enterprises recently issued $1,000 par value 15-year bonds with a 6% coupon paid annually and...

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Finance

Neubert Enterprises recently issued $1,000 par value 15-yearbonds with a 6% coupon paid annually and warrants attached. Thesebonds are currently trading for $1,000. Neubert also hasoutstanding $1,000 par value 15-year straight debt with an 8%coupon paid annually, also trading for $1,000. What is the impliedvalue of the warrants attached to each bond? Do not roundintermediate calculations. Round your answer to the nearestcent.

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4.1 Ratings (446 Votes)
The straight debt which doesnt have any warrants attachedpaying 8 coupon is trading at its par valueA straight debt trades at its par    See Answer
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Neubert Enterprises recently issued $1,000 par value 15-yearbonds with a 6% coupon paid annually and warrants attached. Thesebonds are currently trading for $1,000. Neubert also hasoutstanding $1,000 par value 15-year straight debt with an 8%coupon paid annually, also trading for $1,000. What is the impliedvalue of the warrants attached to each bond? Do not roundintermediate calculations. Round your answer to the nearestcent.

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