Consider the following information
* Pre-exercise entity value of $3,000 (suppose the enterprise value, exclusive of the warrant proceeds, is $3,000)
* $3,000 divided among 15 shares & 5 warrants
* Suppose maturity is 6 months from now; strike price is $100; risk-free rate is 5%; current stock price is $300; standard deviation is 0.22
* Warrant as optioning 1/25 of 15 calls on entity per existing share ($300)
Determine the value of call option, warrant value, and the value per share of existing 15 shares.

Answer rating: 100% (QA)

Answer To find the value of the call option Using BlackScholes formula C S N d1 K ert N d2 where 1 C ... View the full answer