Answered You can hire a professional tutor to get the answer.

QUESTION

A firm has warrants outstanding that allow the holder to buy one share of stock at $25 per share.

A firm has warrants outstanding that allow the holder to buy one share of stock at $25 per share.Also,assume the stock is selling $30 per share,and the warrants are now selling for $7 per warrant( this of course,is above intrinsic value).You can invest $1000 in the stock or warrants.Assume the stock goes to $40,and the warrants trade at their intrinsic value when the stock goes to $40.Would you have a larger total dollar profit by initially investing in the stock or the warrants?

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question