Upstate Water Company just sold a bond with 57 warrants attached.The bonds have a 20-year maturity and an annual coupon of 11.4%,and they were issued at their $1,000 par value.The current yield on similar straight bonds is 17%.What is the implied value of each warrant? Do not round your intermediate calculations.
A) $5.53
B) $6.08
C) $5.25
D) $6.91
E) $4.42
Correct Answer:
Verified
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