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QUESTION
The AAAA Company has 100,000 shares outstanding and 20,000 warrants outstanding.Each warrant has a maturity of one year and gives the holder the...
1. The AAAA Company has 100,000 shares outstanding and 20,000 warrants outstanding. Each warrant has a maturity of one year and gives the holder the right to buy one new share from AAAA Company for $50. Suppose the premium on a call option (on AAAA Co. stock) with a strike price of $50 and maturity of 1 year is $3. What is the market price for one warrant? (10 points)
