2. A firm's capital structure of a company consists of 20,000,000 shares of common stock and 5,000,000 warrants. Each warrant gives its owner the right to purchase one share of newly issued common stock for an exercise price of $80. The warrants are European and will expire three years from today. The market value of the company's assets is $1,000,000,000, and the annual variance of the returns on the firm's assets is 0.16. Treasury bills yield a continuously compounded annual interest rate of 5 percent. The company does not pay a dividend. Find the value of a warrant. 2. A firm's capital structure of a company consists of 20,000,000 shares of common stock and 5,000,000 warrants. Each warrant gives its owner the right to purchase one share of newly issued common stock for an exercise price of $80. The warrants are European and will expire three years from today. The market value of the company's assets is $1,000,000,000, and the annual variance of the returns on the firm's assets is 0.16. Treasury bills yield a continuously compounded annual interest rate of 5 percent. The company does not pay a dividend. Find the value of a warrant