Question
JPS plc's current share price is 3.63. An investor is wondering whether to buy shares in JPS or warrants in the company. The warrant has
JPS plc's current share price is 3.63. An investor is wondering whether to buy shares in JPS or warrants in the company. The warrant has a duration of one year and allows the purchase of 20 JPS shares at an exercise price of 4.10. The cost of the warrant is 5.70. If the share price for JPS is 4.50 in a year's time what are the corresponding returns for buying JPS's shares and warrants on JPS's shares? JPS plc paid no dividend over this period. A. 24% Return on shares 40% Return on the option B. 13% Return on shares 10% Return on the option C. 13% Return on shares 27% Return on the option D. 24% Return on shares 10% Return on the option E. 24% Return on shares 27% Return on the option
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