Valuing warrantsassume a firm has warrants outstanding that, Ask an Expert

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Valuing warrants

Assume a firm has warrants outstanding that permit the holder to buy one new share of stock at $25 per share. The market price of the stock is now $34.

a. What is the intrinsic value of the warrant?

b. Why might the warrant sell for $2 on the market even if the stock price is $22?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91797104

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