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( 20 points) Assume u have a warrant with a strike price of 1000 on a company whose value is 2500 with no outstanding debt.
( 20 points) Assume u have a warrant with a strike price of 1000 on a company whose value is 2500 with no outstanding debt. Thus the total company value is currently represented by one share and the warrant is on one share. 1. Assuming that the warrant is realized at expiry what will be the new share price of the company? (10 points) 2. What will be the gain on the warrant? (5 points) 3. Now assume that the company has 1900 in equity and 600 in debt. Would u realize the warrant now? (5 points)
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