=+LG 5 P17–19 Common stock versus warrant investment Rajesh Chauhan is a successful doctor who is looking to invest some of his savings (INR 1,000,000) in Dr. Reddy’s Laboratories, an Indian multinational pharmaceutical company based in Hyderabad, Telangana, India. He can either buy common stock, which is currently selling for INR 2,486.10 per share, or he can purchase its warrants which provide for the purchase of two shares of common stock at INR 2,200, and are currently selling for INR 700. The stock is expected to rise to a market price of INR 2,600 next year, so the expected theoretical value of a warrant over the next year is INR 150. The expiration date of the warrant is 1 year from the present.