Calculate the call value of owens corning warrants

Reference no: EM13266279

When Owens Corning emerged from bankruptcy in 2006, the debt holders became the sole owners of the company. But the old stockholders were not left entirely empty handed. They were given warrants to buy the new common stock at any point in the next seven years for $46.50 a share. Because the stock in the restructured firm was worth about $31.25 a share, the stock needed to appreciate by 50% before the warrants would be worth exercising. The standard deviation of Owens Corning stock was 41% a year and the interest rate when the warrants were issued was 6%. Calculate the call value of Owens Corning warrants. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

What's the Call Value?

Reference no: EM13266279

Questions Cloud

What is the aftertax salvage value of the asset : An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $16,560,000 and will be sold for $3,680,000 at the end of the project.

What is the output voltage of a four-input summing amplifier : A four-input summing amplifier has all input resistors at 10 k and the feedback resistor equal to 2.2 k. If the input voltages are all equal to 2 V, what is the output voltage

Explain liquid butane and one containing liquid propane : A tank containing liquid butane and one containing liquid propane are sitting adjacent to one another. Each tank is equipped with a regulator with a pressure gauge

What is the objects speed at the bottom of the slope : A 65.0 kg object slides down a 30o angle slope from rest at a height of 15.0 m. The coefficient of kinetic friction between the object and the slope surface is 0.15. What is the object's speed at the bottom of the slope

Calculate the call value of owens corning warrants : Calculate the call value of Owens Corning warrants. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

What is the volume flow rate through the pipe : A 1.0-cm diameter pipe widens to 2.0 cm then narrows to 5.0 mm. Liquid flows though the first segment at a speed of 4.0 m/s. What is the speed of the liquid in the second and third segments of pipe

What is the present value : An investment will pay you $24,000 in 9 years. The appropriate discount rate is 9 percent compounded daily.

Find the radius of the exoplanets orbit : Astronomers discover an exoplanet (a planet of a star other than the Sun) that has an orbital period of 3.03 Earth years in its circular orbit around its sun, Find the radius of the exoplanet's orbit in meters

Evidenced based research on diabetes : Identify a research or evidence-based article that focuses comprehensively on a specific intervention or diagnostic tool for the treatment of diabetes in adults or children

User Account

All Pages