Diamond Drill Inc.has 150,000 shares and 15,000 warrants outstanding.A warrant holder can purchase a new share of equity for five warrants and €5.00 per warrant.The equity is currently selling for €27 per share.If the warrants are all exercised immediately,what would be the market price of the equity?

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When all warrants are exercised, 15,000 new shares are issued, and the company receives €375,000 (15,000 warrants / 5 warrants per share * €5 per warrant). The total number of shares becomes 165,000 (150,000 existing + 15,000 new). The total market value of the company is €4,050,000 (150,000 shares * €27/share + €375,000). The new market price per share is €26.96 (€4,050,000 / 165,000 shares).