Curry Corporation is setting the terms on a new issue of bonds with warrants. T

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 at a price of $35 (the current price of the stock today).
The investment bankers estimate that each warrant will have a value of $10.00. A similar straight-debt issue would require a 10% coupon. a. What coupon rate should be set on the bonds-with-warrants so that the package would sell for $1000? b. If the stock price rises by 5% per year and the convertibles are exercised after 10 years what is the cost to the company of the bonds plus warrants
package?