Value of Stock Warrants - The Preston Toy Co has warrants outstanding that allow the holder

Value of Stock Warrants - The Preston Toy Co has warrants outstanding that allow the holder

Question # 00586542 Posted By: katetutor Updated on: 09/10/2017 10:22 AM Due on: 09/10/2017
Subject Finance Topic Finance Tutorials:
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Value of Stock Warrants
The Preston Toy Co has warrants outstanding that allow the holder to purchase a share of stock for $22. (exercise price) The common stock is currently selling for $28, while the warrant is selling for $9.25 per share.

a. What is the intrinsic (minimum) value of this warrant?
b. What is the speculative premium on this warrant?
c. What should happen to the speculative premium as the expiration date approaches?
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    Tutorial # 00584638 Posted By: katetutor Posted on: 09/10/2017 10:22 AM
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