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Compute the gain on the sale of the stock warrants

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Question - On February 24, BMC Company purchased 4,000 shares of Winn Corp.'s newly issued 6 percent cumulative $75 par preferred stock for $304,000. Each share carried one detachable stock warrant entitling the holder to acquire at $10 one share of Winn no-par common stock. On February 25, the market price of the preferred stock ex-warrants was $72 per share, and the market price of the stock warrants was $8 per warrant. On December 29, BMC sold all the stock warrants for $41,000. The gain on the sale of the stock warrants was

A) $0.

B) $1,000.

C) $9,000.

D) $10,600.

Please show all work and explain answer.

Reference no: EM131827569

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