Thomson Engineering Is Issuing New 20-Year Bonds That Have Warrants

question 25

Multiple Choice

Thomson Engineering is issuing new 20-year bonds that have warrants attached.If not for the attached warrants,the bonds would carry an 11% annual interest rate.However,with the warrants attached the bonds will pay an 8% annual coupon.There are 30 warrants attached to each bond,which have a par value of $1,000.What is the value of the straight-debt portion of the bonds?

• A)$652.55
• B)$686.89
• C)$723.05
• D)$761.10
• E)$799.16

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Definitions:

PB2

Often refers to a specific pin, connector, or component in electronic devices or circuit boards, but without more context, its specific meaning can vary widely.

PLC

Programmable Logic Controller, a digital computer used for automation of industrial processes, such as control of machinery or factory assembly lines.

Timing Circuit

An electronic circuit designed to produce specific time delays or to trigger events at precise intervals.

Cascading

In the programming of timers and counters, a technique used to extend the timing or counting range beyond what would normally be available. This technique involves the driving of one timer or counter instruction from the output of another, similar instruction.