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A firm issued $2 million worth of bonds with warrants today. Each Bond with Warrants...

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Finance

A firm issued $2 million worth of bonds with warrants today. Each Bond with Warrants has a par value = $1,000. It includes 15 warrants per bond with a strike price = $87, expiring in 10 years. Each warrant is worth $12. The current stock price is $76 per share. The firm is expecting a stock price growth of 7% per year indefinitely. What is the expected return of the warrant? Enter your answer as a decimal with 4 decimal places. e.g. 5.6789% should be entered as 0.0568.

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