Answer:
<em>$726,750</em>
Explanation:
According to the given problem,
Bonds issued at 103% of the face value.
Face value of the bonds = $1000
Coupon rate = 7%
Number of bonds issued = 750
The data indicates that each bond is issued with a separate stock warrant which has a market value of $50.
However the question was provided that the value of the proceeds from issuing the bonds should be found.
At 102 per cent of the bond's face value, each bond is issued.
Request bond price along with stock warrant.
= 102% ($1000) = $1020
Total number of bonds = 750
Proceeds from the issuance of total number of bonds
= 750 * $1020 = $765 000
The value of the proceeds from issuing the bonds therefore is $765 000.
You deduct the $50 stock purchase warrant at 102 per cent initial market value.
50 * 1.03 = 51
51*750 = 38250
<em><u>$765,000 - $38,250 = $72,6750</u></em>
