case study chp 16

# case study chp 16 - A),findthefollowing Straightdebtvalue...

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-Straight debt value.       -Implied price of all warrants.      -Implied price of each warrant.      -Theoretical value of a warrant. (1) Straight debt value. ( Based off example on pg. 783) Present value interest Present value Payments factor at 12% [(1) X (2)] Year(s) {1} {2} {3} 1--3 \$1,206,345  2.4  \$2,896,434.35  (2) Implied price of all warrants. Implied price of all warrants =  \$103,566.00   (3) Implied price of each warrant. Implied price of each warrant=  \$2.07  A.)  Under the debt with warrants, find the following:

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(4) Theoretical value of a warrant. Theoretical value of a warrant = -4
Formaula's (Pg 221 in text book) 1 x [ 1 - 1 ] I I = 12% N=3 1 x [ 1- 1 ] 0.12 8.33 [ 1- 1 ] 1.12 Formaula's (Pg. 783 in text book) Implied price of all Price of bond with                 -       Straight bond value warrants = with warrants attached Price of bond with =  \$3,000,000           Straight bond Implied price of all

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