DOLLORAMA GOT 400k shares outstanding. consider all of its outstanding 4-month warrants, have exercise price of $47 were exercised, the total number of shares outstanding be 520k. dOLLORAMA is trading at $48 and will either increase 8% or decrease 25% in 4 months.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question

F1

DOLLORAMA GOT 400k shares outstanding.
consider all of its outstanding 4-month
warrants, have exercise price of $47 were
exercised, the total number of shares
outstanding be 520k. dOLLORAMA is trading
at $48 and will either increase 8% or decrease
25% in 4 months.
Lets say that risk-free interest rate 3%/month
,calculate the value of the warrant?
Transcribed Image Text:DOLLORAMA GOT 400k shares outstanding. consider all of its outstanding 4-month warrants, have exercise price of $47 were exercised, the total number of shares outstanding be 520k. dOLLORAMA is trading at $48 and will either increase 8% or decrease 25% in 4 months. Lets say that risk-free interest rate 3%/month ,calculate the value of the warrant?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Investment in Stocks
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education