Why are warrants speculative

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Reference no: EM131841975

1. Why are warrants speculative? Why are they issued?

2. Which is the amount that should be paid for a stock that will pay a dividend of $2.47 in one year and $3.14 in two years? After that, the stock price will grow at a constant 5% per year forever. The appropriate discount rate is 12%.

Show your answer to the nearest $.01.

Do not use the $ sign in your answer.

Reference no: EM131841975

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