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Quantum Inc. has warrants outstanding that allow the holder to purchase 2.0 shares of stock per warrant at $28 per share (exercise price). Thus each

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Quantum Inc. has warrants outstanding that allow the holder to purchase 2.0 shares of stock per warrant at $28 per share (exercise price). Thus each individual share can be purchased at $28 with the warrant. The common stock is currently selling for $38. The warrant is selling for $24.00. a. What is the intrinsic (minimum) value of this warrant? (Do not round Intermediate calculations and round your answer to 2 decimal places.) Intrinsic value b. What is the speculative premium on this warrant? (Do not round Intermediate calculations and round your answer to 2 decimal places.) Speculative premium c. What should happen to the speculative premium as the expiration date approaches? O Speculative premium should decrease. O Speculative premium should increase. O Speculative premium should not change. Assume you can buy a warrant for $6 that gives you the option to buy one share of common stock at $16 per share. The stock is currently selling at $19 per share. a. What is the intrinsic value of the warrant? Intrinsic value b. What is the speculative premium on the warrant? Speculative premium c. If the stock rises to $28 per share and the warrant sells at its theoretical value without a premium, what will be the percentage increase in the stock price and the warrant price if you buy the stock and the warrant at the prices stated above? (Do not round Intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Increase in stock price Increase in warrant price ** % 27 The warrants of Dragon Pet Co. allow the holder to buy a share of stock at $33.90 and are selling for $13.70. The stock price is currently $27.00. To what price must the stock go for the warrant purchaser to at least be assured of breaking even? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Breakeven price

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