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Preston Toy Co. has warrants outstanding that allow the holder to purchase a share of...

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Finance

Preston Toy Co. has warrants outstanding that allow the holder to purchase a share of stock for $13 (exercise price). The common stock is currently selling for $19, while the warrant is selling for $9.15 per share.

a. What is the intrinsic (minimum) value of this warrant? (Do not round intermediate calculations and round your answer to 2 decimal places.) b. What is the speculative premium on this warrant? (Do not round intermediate calculations and round your answer to 2 decimal places.)

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