Abc corp has 4 million shares of common stock outstanding


ABC Corp. has 4 million shares of common stock outstanding. The company has 500,000 warrants being traded in the market. Each warrant has the right to buy one share of common stock at $20 per share. The warrant will expire one year from today. ABC Corp. stock is selling for $22 per share and the volatility of the return on stock is 0.005. The risk-free rate is 5 percent. Estimate the warrant value.

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Financial Management: Abc corp has 4 million shares of common stock outstanding
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