A company has 20 million shares outstanding that are trading at $30 per share.The company has 2 million warrants outstanding that have an exercise price of $28 per share.What is the payoff to the warrant holders exercising them,rounded to the nearest dollar?
A) $3,636,364
B) $ 2,800,000
C) - $3,636,364
D) $6,000,000

Question

Quizplus · Accepted Answer

M = 2 million,N = 20 million,V = $30 x 20 million = $600 million,X = $28
A.m / (n + m)* (V - (n * X))= 2 / (22)* (600 - (20*28))= $3,636,364

A Company Has 20 Million Shares Outstanding That Are Trading