A firm with 5 million shares worth $50 each is considering issuing 200,000 warrants . Each warrant is giving the holder the right to buy one share with an exercise price of $100 in 5 years. You are hired to find the cost of this. You know that the volatility of the shares of the firm is 40% per year and that the company pays no dividends. How will you approach the problem given to you by the Board of Directors of this firm today? Make a note that warrants are different than call options in that their exercise leads to the company issuing more shares and then selling them to the call option holder for the strike price.