Curry Corporation Is Setting the Terms on a New Issue

question 52

Multiple Choice

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 $10.00.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?

• A)6.75%
• B)7.11%
• C)7.48%
• D)7.88%
• E)8.27%

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Definitions:

Cardiac Output

The volume of blood the heart pumps through the circulatory system in one minute, an important measure of heart function and overall health.

Regulation

The control or maintenance of a process or function at a certain level or within certain limits.

Pulmonary Vein

A vein that carries oxygenated blood from the lungs to the left atrium of the heart.

Capillary

A capillary is a tiny blood vessel in the body's circulatory system that connects arterioles and venules, facilitating the exchange of water, oxygen, carbon dioxide, and other nutrients and waste substances between blood and tissues.