What is the intrinsic value of the warrant

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Question - You can buy a warrant for $8.50 that gives you the option to but one share of common stock at $19.00 per share. The stock is currently selling at $16.50 per share.

Required -

a. What is the intrinsic {minimum} value of the warrant?

b. What is the speculative premium on the warrant?

c. If the share price rises to $35.00 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 share price and the warrant price if you bought a share and the warrant at the prices stated above, $16.50 and $8.50?

Reference no: EM133076120

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