assume the firm's stock now sells for $20 per share. the company wants to sell some 20-year, $1,000 par value bonds with interest paid annually. each bond will have attached 25 warrants, each exercisable into 1 share of stock at an exercise price of $25. the firm's straight bonds yield 9%. assume that each warrant will have a market value of $3.75 when the stock sells at $20. what coupon interest rate must the company set on the bonds with warrants if they are to clear the market? (hint: the convertible bond should have an initial price of $1,000.) do not round intermediate calculations. round your answer to two decimal places.
