Intrinsic value of warrant at the time of purchase

Assignment Help Financial Management
Reference no: EM132053494

The Gifford Investment Company bought 80 Cable Corporation warrants one year ago and would like to exercise them today. The warrants were purchased at $28 each, and they expire when trading ends today. (Assume there is no speculative premium left.) Cable Corporation common stock was selling for $45 per share when Gifford Investment Company bought the warrants. The exercise price is $34, and each warrant entitles the holder to purchase two shares of stock, each at the exercise price. a. What was the intrinsic value of a warrant at the time of purchase? b. What was the speculative premium per warrant when the warrants were purchased? The purchase price, as indicated earlier, was $28. (Do not round intermediate calculations and round your answer to 2 decimal places.)

Reference no: EM132053494

Questions Cloud

What is the operating cash flow for the project in year two : The tax rate is 34 percent and the required return on the project is 10 percent. What is the operating cash flow for the project in year 2?
Determine what is considered deviant and why : You will want to consider questions of who and what is considered deviant and why. You should carefully evaluate the contradictions, nuances, and paradoxes.
Calculate the contribution margin for one case : Assume that for the time in question you have 2000 cases in the proportions above. (What are the proportions of the total cases for each payer?)
Describe the actions you can take to support company user : You don't have enough people to provide support staff visits to a user who is having problems. Describe the actions you can take to support your company users.
Intrinsic value of warrant at the time of purchase : What was the intrinsic value of a warrant at the time of purchase?
What are issues that might cause increased traffic : What are issues that might cause increased traffic on Ethernet LANs and the use of Layer 2 switches?
What is the conversion value of the bond : What is the conversion value of the bond? What is the conversion premium?
Research the trends and issue affecting the global workforce : Consider arguments for and against each of the three countries' approaches to compensation. Research the trends and issues affecting the global workforce.
What was the probable cause of the error : Should the construction company "win" its lawsuit against the software vendor? Why or why not? What was the probable cause of the error?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd