JPS plc's current share price is £3.63. An investor is wondering whether to buy shares in JPS or warrants in the company. The warrant has a duration of one year and allows the purchase of 20 JPS shares at an exercise price of £4.10. The cost of the warrant is £5.70. If the share price for JPS is £4.50 in a year's time what are the corresponding returns for buying JPS's shares and warrants on JPS's shares? JPS plc paid no dividend over this period
JPS plc's current share price is £3.63. An investor is wondering whether to buy shares in JPS or warrants in the company. The warrant has a duration of one year and allows the purchase of 20 JPS shares at an exercise price of £4.10. The cost of the warrant is £5.70. If the share price for JPS is £4.50 in a year's time what are the corresponding returns for buying JPS's shares and warrants on JPS's shares? JPS plc paid no dividend over this period
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
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JPS plc's current share price is £3.63. An investor is wondering whether to buy shares in JPS or warrants in the company. The warrant has a duration of one year and allows the purchase of 20 JPS shares at an exercise price of £4.10. The cost of the warrant is £5.70. If the share price for JPS is £4.50 in a year's time what are the corresponding returns for buying JPS's shares and warrants on JPS's shares? JPS plc paid no dividend over this period
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