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You can buy a warrant for $13 that gives you the option to buy one share of common stock at $12.50 per share. The stock
You can buy a warrant for $13 that gives you the option to buy one share of common stock at $12.50 per share. The stock is currently selling at $21 per share
a) what is the intrinsic (minimum) value of the warrant?
b) what is the speculative premium on the warrant?
c)if the stock rises to $50 per share and the warrant sells at its intrinsic value plus a speculative premium of $1 what will be the percentage increase in the stock price and the warrant price if you bought the stock and the warrant at the prices stated above $21and $13
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