Assume a corporation has $400,000 in earnings and 200,000 shares outstanding ($2 in earnings per share). Also assume there are warrants outstanding to purchase 40,000 shares at $25 per share. The stock is currently selling at $40 per share. In considering the effect of the warrants outstanding, what would revised earnings per share be?
Answer to relevant QuestionsCompute the downside risk as a percentage in problem 1. What does this mean? Assume you bought a convertible bond two years ago for $900. The bond has a conversion ratio of 32. When the bond was purchased, the stock was selling for $25 per share. The bond pays $75 in annual interest. The stock pays ...Why would a high-beta stock often have a greater speculative premium than a low-beta stock? Assume a stock is selling for $48.50 with options available at 40, 50, and 60 strike prices. The 50 call option price is at 2.75. a. What is the intrinsic value of the 50 call? b. Is the 50 call in the money? c. What is the ...How does the concept of margin on a commodities contract differ from that of margin on a stock purchase?
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