ou can buy a warrant for $12.00 that gives you the option to buy one share of
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Question:
ou can buy a warrant for $12.00 that gives you the option to buy one share of common stock at $21.00 per share. The stock is currently selling at $20.00 per share.a.What is the intrinsic (minimum) value of the warrant?
Intrinsic value$
b.What is the speculative premium on the warrant?
Speculative premium$
c.If the stock rises to $46.00 per share and the warrant sells at its intrinsic value plus a speculative premium of $1.00, 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, $20.00 and $12.00?
Percentage increasein Share %
in Warrant %
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