Omega Airline’s capital structure consists of 1.5 million shares of equity and zero coupon bonds with a face value of $10 million that mature in 6 months. The firm just announced that it will issue warrants with an exercise price of $95 and 6 months until expiration to raise the funds to pay off its maturing debt. Each warrant can be exercised only at expiration and gives its owner the right to buy a single newly issued share of equity. The firm will place the proceeds from the warrant issue immediately into Treasury bills.

The market value balance sheet shows that the firm will have assets worth $160 million after the announcement. The company does not pay dividends. The standard deviation of the returns on the firm’s assets is 65 per cent, and Treasury bills with a 6-month maturity yield 6 per cent. How many warrants must the company issue today to be able to use the proceeds from the sale to pay off the firm’s debt obligation in 6 months?