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coupon payment

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jlg2332 | 20:01 Mon 12th Dec 2005 | Business & Finance
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if a company today issued 10 yr 5% coupon bonds at $1100. the bonds have warrents attached which give the owner the right to purchase 100 shares in 2 yrs for $20 each. currently the stock is trading for $10 per share, the risk free rate is 3% and the standard deviation of return is 50%. if the firm had wished to issue straight debt(no warrent) at PAR, what coupon payment would they need to offer?

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