Through Fire, Inc., an all-equity firm, has 12 shares of stock outstanding.

Yesterday, the firm’s assets consisted of 13 ounces of platinum, currently worth $1,030 per ounce. Today, the company issued Janet Wu a warrant for its fair value of $1,030.

The warrant gives Janet the right to buy a single share of the firm’s stock for $1,050 and can be exercised only on its expiration date one year from today. The firm used the proceeds from the issuance to immediately purchase an additional ounce of platinum.

a. What was the price of a single share of stock before the warrant was issued?

b. What was the price of a single share of stock immediately after the warrant was issued?

c. Suppose platinum is selling for $1,070 per ounce on the warrant’s expiration date in one year. What will be the value of a single share of stock on the warrant’s expiration date?