Question
The Simpsons Corporation has warrants outstanding that allow the holder to purchase one common share at $17 per share (option price). The common stock is
The Simpsons Corporation has warrants outstanding that allow the holder to purchase one common share at $17 per share (option price). The common stock is currently selling for $25. The warrant is selling for $11.50.
Required:
a. What is the intrinsic (minimum) value of this warrant?
b. What is the speculative premium on this warrant? (Round the final answer to 2 decimal places.)
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Financial Management Principles And Applications
Authors: J William Petty, Sheridan Titman, Arthur J Keown, John D Martin, Peter Martin, Michael Burrow, Hoa Nguyen
6th Edition
1442539178, 9781442539174
