Curry Corporation Is Setting the Terms on a New Issue

question 12

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%

---

Definitions:

Congressional Law

Legislation that has been enacted by the United States Congress, which consists of the House of Representatives and the Senate.

Don't Ask, Don't Tell

A former policy of the U.S. military that barred openly gay, lesbian, or bisexual persons from military service but prohibited discrimination against closeted service members.

Full Enforcement

The rigorous and complete application of laws or regulations without exceptions, ensuring compliance and accountability.

U.S. District Court

The general trial courts of the United States federal court system where cases involving federal law are initiated.