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Posted on Jul 25, 2024

Suppose that the warrant in problem 4 could be purchased for $ 5 and that a common stock price rise to $ 4 5 is

Suppose that the warrant in problem

4

could be purchased for $

5

and that a common stock price rise to $

45

is expected to occur within days. What effect will this have on the intrinsic present value and maximum price of the warrant?

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