PSW Has Warrants Outstanding That Have an Exercise Price of $10.Each

question 7

Multiple Choice

PSW has warrants outstanding that have an exercise price of $10.Each warrant entitles the holder to purchase one share of PSW common stock.Last week PSW common stock was selling for $12 per share and, at the same time, the warrants traded at $5 each.Determine the warrant's premium over the formula value.

• A)$0
• B)$2
• C)$3
• D)$5

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