1. Suppose a firm has 20 shares of equity, a 10-year zero-coupon debt with a maturity value of $200, and warrants for 8 shares with a strike price of $25. What is the value of the debt, the share price, and the price of the warrant?
2. Suppose a firm has 20 shares of equity and a 10-year zero-coupon convertible bond with a maturity value of $200, convertible into 8 shares. What is the value of the debt, the share price, and the price of the warrant?
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