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Curry Corporation is setting the terms on a new issue of bonds with warrants. The bonds will have a ...

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Curry Corporation is setting the terms on a new issue of bonds with warrants. The bonds will have a ...

Curry Corporation is setting the terms on a new issue of bonds with warrants. The bonds will have a 30-year maturity and annual interest payments. Each bond will come with 20 warrants that give the holder the right to purchase one share of stock per warrant. The investment bankers estimate that each warrant will have a value of $10. A similar straight-debt issue would require a 10% coupon. What coupon rate should be set on the bonds with warrants so that the package would sell for $1,000?

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6.75%

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7.11%

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7.48%

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7.88%

Textbook

Financial Management: Theory and Practice

Edition: 4^th

Authors: Brigham, Ehrhardt, Gessaroli, Nason

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jbee

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More solutions for this book are available here

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18iq Author

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Thanks

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This helped my grade so much Perfect

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