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QUESTION
Gregg Company recently issued two types of bonds. The first issue consisted of 20-year straight debt with an 8% coupon paid annually.
Gregg Company recently issued two types of bonds. The first issue 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 $1,000 par values.What is the implied value of the warrants attached to each bond?
