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Mia's Pet Store Has Warrants That Allow the Purchase of Two

question 159

Short Answer

Mia's Pet Store has warrants that allow the purchase of two shares of its outstanding common stock at $30 per share. The common stock price per share is $33 and the market value of the warrant is $8.
(a) Calculate the theoretical value of the warrant.
(b) Calculate the market premium for the warrant.


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