Question: ( 20 points) Assume u have a warrant with a strike price of 1000 on a company whose value is 2500 with no outstanding debt.

( 20 points) Assume u have a warrant with a strike price of 1000 on a company whose value is 2500 with no outstanding debt. Thus the total company value is currently represented by one share and the warrant is on one share. 1. Assuming that the warrant is realized at expiry what will be the new share price of the company? (10 points) 2. What will be the gain on the warrant? (5 points) 3. Now assume that the company has 1900 in equity and 600 in debt. Would u realize the warrant now? (5 points)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant, specializing in retail management and...

Assume u have a warrant with a strike price of 1000 on a company whose value is 2500 with no outstanding debt. Thus the total company value is currently represented by one share and the warrant is on...

Use the extended DuPont equation to provide a summary and overview of your firm?s financial condition. Be sure to do all calculations for 3 years, using Excel. Use real numbers from the financials,...

I wanted to ask a question regarding questions 12 and 13, under section 16.4 of the file I uploaded. In question 12, we had to calculate the value of the firm without leverage. In question 13 we had...

I have a Project I am working on for Portfolio Management. I finished most of the data entry and creating of tabs, but I still have about 30% of the project that I need help on. I expect it to take...

show work. thank u 4. Assume u have a warrant on a company with a strike of 1000. Now assume that company value is 1000 today and u have no debt. rfr is 5%. 1. Assuming the company volatility is 20%...

4. Assume u have a warrant on a company with a strike of 1000. Now assume that company value is 1000 today and u have no debt. rf is 5%. 1. Assuming the company volatility is 20% what will be the...

4. Assume u have a warrant on a company with a strike of 1000. Now assume that company value is 1000 today and u have no debt. rfr is 5%. 1. Assuming the company volatility is 20% what will be the...

just answer question this 1 If the actual price of the stock is $100, what is your assessment of the proposed operating plan? What are some actions the company can take to improvement the operating...

I need help with the answers for the attached papers. ACC201e Examination - January Semester 2016 Financial Accounting Friday, 20 May 2016 10:00 am - 12:00 pm...

Hi! I have a question I need help with on Arbitrage Pricing Theory. See attached pdf, I'm looking for the solution of question 6. Only question 6! Thanks so much! ECON 255 Problem Set 3 1. Real Cash...

Data file XR16056 lists the following information for a sample of local homes sold recently: selling price (dollars), lot size (acres), living area (square feet), and whether the home is air...

Write chemical equations, showing all necessary reagents, for the preparation of tert-butyl alcohol by: (a) Reaction of a Grignard reagent with a ketone (b) Reaction of a Grignard reagent with an...

Which muscular movements pull the forearm toward the shoulder? Select all that apply. Biceps contracts Triceps relaxes Triceps contracts Biceps relaxes

8:37 * N. 80% i ... OBJECTIVES: Create relationships Create a Pivot Table from Related Tables Create a PivotChart Modify the PivotChart The major section in this chapter :ontinuation is: Data...