Warrant Value Superior Clamps, Inc., has a capital structure consisting of 4 million shares of common stock and 500,000 warrants. Each warrant gives its owner the right to purchase one share of newly issued common stock for an exercise price of $20. The warrants are European and will expire one year from today. The market value of the company’s assets is $88 million, and the annual variance of the returns on the fi rm’s assets is 0.04. Treasury bills that mature in one year yield a continuously compounded interest rate of 7 percent. The company does not pay a dividend. Use the Black–Scholes model to determine the value of a single warrant. LO.1