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Stock, Bond, Warrants

1. The Burma Hat Company's warrant is trading for $10.20. The warrant carries the options to purchase two shares of common stock for $48.00. What is the speculative premium if the stock price is $51.03?

2.Allais Company's bond has a @114 annual coupon, maturing in 10 years at a value of $1,000 has a current market price of $1140. What is the nominal yield of the bond?

3. A firm as $2,000,000 in its common stock account and $20,000,000 in its paid-capital account. The firm issued 500,000 shares of common stock. What is the par value of the common stock?

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1. The Burma Hat Company's warrant is trading for $10.20.  The warrant carries the options to purchase two shares of common stock for $48.00.  What is the speculative premium if the stock price is $51.03?

Intrinsic value = Number of shares that can be purchased x (Current market price- Exercise price)
or Intrinsic value = ...

Solution Summary

Calculates speculative premium, nominal yield of the bond and par value of the common stock.

$2.19