The exercise price of The Canadian Dairy Company is $17. You purchase the warrants for $4.00 each when Canadian Dairy's stock price is $20.00 per share. Each warrant entitles you to purchase one share of CDC stock. Calculate your percentage gain assuming the warrant premium drops by 50% and you sell your warrants when the stock reaches $30.00 per share.
A) 37.5%
B) 87.5%
C) 137.5%
D) 237.5%
E) 337.5%
Correct Answer:
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Q122: The common stock of BioTech Industries pays
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