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What is the speculative premium on the warrant

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Reference no: EM132712992

Hanson Toy Co. has warrants outstanding that allow the holder to purchase 1.5 shares of stock per warrant at $22 per share (option price). The common stock is currently selling for $28, while the warrant is selling for $12.25 per share. (Leave no cells blank - ensure that "0" is entered wherever required.)

Problem a. What is the intrinsic (minimum) value of this warrant?

Problem b. What is the speculative premium on this warrant? (Round the final answer to 2 decimal places.)

Reference no: EM132712992

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