Explore BrainMass

Explore BrainMass

    Stock, Bond, Warrants

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:59 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/209180

    Solution Preview

    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

    ADVERTISEMENT