29. Option maturity (S22-3) Some corporations have issued perpetual warrants. Warrants are call options issued by a firm, allowing the warrant holder to buy the firm’s stock.

a. What does the Black–Scholes formula predict for the value of an infinite-lived call option on a non-dividend-paying stock? Explain the value you obtain. (Hint: What happens to the present value of the exercise price of a long-maturity option?)