Common stock versus warrant investmentPersonal Finance ProblemTom Baldwin can invest $9,000 in the common stock or the warrants of Lexington Life Insurance. The common stock is currently selling for $70 per share. Its warrants, which provide for the purchase of 4 shares of common stock at $65 per share, are currently selling for $23. The stock is expected to rise to a market price of $74 within the next year, so the expected theoretical value of a warrant over the next year is $36. The expiration date of the warrant is 1 year from the present.

a.If Mr. Baldwin purchases the stock, holds it for 1 year, and then sells it for $74, what is his total gain? (Ignore brokerage fees and taxes.)

b.If Mr. Baldwin purchases the warrants and converts them to common stock in 1 year, what is his total gain if the market price of common shares is actually $74? (Ignore brokerage fees and taxes.)

c.Repeat parts a and b, assuming that the market price of the stock in 1 year is $71.

d. Discuss the two alternatives and the trade-offs associated with them.

I JUST NEED HELP WITH C. CAN SOMEONE EXPLAIN TO ME HOW TO GET IT?