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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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