A Firm Has 600 Shares of Stock and 100 Warrants

question 10

Multiple Choice

A firm has 600 shares of stock and 100 warrants outstanding.Assume the warrants are all exercised.The market value of the firm's assets is $25,000 and the market value of its debt is $8,000.Each warrant grants its owner the right to buy one new share at $27.50.What is the gain on one warrant?

• A)$.87
• B)$.79
• C)$.25
• D)$.38
• E)$.71

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Definitions:

Stakeholders

Individuals or groups that have an interest or concern in an organization and can affect or be affected by the business operations.

Social Entrepreneur

An entrepreneur focused on creating and implementing solutions to social, cultural, or environmental issues, often with an emphasis on innovative and sustainable change.

Discretionary Stakeholders

Stakeholders who have a potential interest or investment in a project or business but their involvement is not critical.

Public Policies

Guidelines and principles adopted by governmental bodies to address societal issues.