Calculate the implied price of each warrant for the bond shown in the following table. Price of bond with warrants attached par value coupon interest rate (paid annually) interest rate on equal-risk straight bond years to maturity number of warrants attached to bond $1,400 $1,100 8% 9% 15 25 The straight value of the bond is The implied price of all warrants is The implied price of each warrant is
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Calculate the implied price of each warrant for the bond shown in the following table.
| Price of bond with warrants attached | par value | coupon interest rate (paid annually) | interest rate on equal-risk straight bond | years to maturity | number of warrants attached to bond |
| $1,400 | $1,100 | 8% | 9% | 15 | 25 |
The straight
The implied price of all warrants is
The implied price of each warrant is
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