Purchase Solution

implied value of the warrants attached to each bond

Not what you're looking for?

Ask Custom Question

Gregg Company recently issued two types of bonds. The first issue consisted of 20-year straight debt with an 8% annual coupon. The second issue consisted of 20-year bonds with a 6% annual coupon and attached warrants. Both issues sold at their $1,000 par values. What is the implied value of the warrants attached to each bond?

Purchase this Solution
Solution Summary

Value of warrants is expressed in the solution.

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Implied Value of the Warrants Attached Bonds

    The second issue consisted of 20-year bonds with a 6 percent annual coupon and attached warrants. Both issues sold at their $1000 par values. What is the implied value of the warrants attached to each bond? Please see the attachment.

  • Implied value of warrant

    296329 Compute the implied value of each warrant. Charles River Company has just sold a bond issue with 10 warrants attached. The bonds have a 20-year maturity, an annual coupon rate of 12.0 percent, and they sold at their $1,000 par value.

  • Finance credit management

    See attached file for full problem description. Please see the attached file. Excel file attached with all calculations. The expert calculates the implied value of the warrants attached to each bond.

  • Warrants Attached to Bonds

    The second issue consisted of 20-year with bonds a 6% annual coupon and attached warrants. Both issues sold at their $1000 par value. What is the implied value of the warrants attached to each bond? The first one: N = 20 I/Y = 8 PV = ?

  • Finance: Implied value of Warrant

    Neubert also has outstanding $1,000 par value 15 -year straight debt with 7% coupon paid annually, also trading for $1,000. What is the implied value of the warrants attached to each bond? Step by step solution attached in excel.

  • Debt with Warrants Analysis

    First, the implied value of a warrant is the price that was effectively paid for each warrant attached to the bond or liability. Second, the theoretical value is the amount that the warrant can be expected to be sold in the market.

  • Calculate the company's current debt ratio.

    Calculate the implied value of the warrants attached to each bond. b. Discuss the advantages to the investor of purchasing bonds with warrants instead of straight bonds? c.

  • Warrants

    The company wants to sell some 20-year, annual interest, $1,000 par value bonds. Each bond will have attached 50 warrants, each exercisable into 1 share of stock at an exercise price of $25.

  • Bond with Warrants

    The company wants to raise $20 million by issuing 20-year, annual interest, $1,000 par value bonds. Each bond will have 40 warrants attached, each exercisable into 1 share of stock at an exercise price of $36. The firms straight bonds yield 8%.

View More Related Solutions