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Which of the following statements concering the MM extension of growth is NOT correct?
A. The tax shields should be discounted at the unlevered cost of equity.
B. The value of a growing tax shield is greater than the value of a constant tax shield.
C. For a given D/S, the levered cost of equity is greater then the levered cost of equity under MM’s original (with tax) assumptions.
D. For a given D/S, the WACC is great than the WACC under the MM’s Original (with tax) assumptions.
E. The totla value of the firm is independent of the amount of debt it uses.

Upstate Water Company just sold a bond with 50 warrants attached. The bongs have a 20 year maturity and an annual coupon of 12%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 15%. What is the implied value of each warrant?
A. $3.76
B. $3.94
C. $4.14
D. $4.35