Bubba owns a perpetual warrant to buy one share of Internet Corporation common stock at $30. Internet Corporation stock is trading at 41.50 and is ex-dividend today at $0.75. What is the market value of Bubba's warrant?
A)5.75
B)5.62
C)5.38
D)cannot be determined from this information

Question

Quizplus · Accepted Answer

cannot be determined. Bubba can put away the calculator. The warrant is "perpetual" so the value is not determinable from today's price of the common stock.

Bubba Owns a Perpetual Warrant to Buy One Share of Internet