What is the new value of the company? What is the new stock price?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 8P
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The capital structure of DCF Enterprises Inc.
consists of 18 million shares of common stock
and 1 million warrants. Each warrant gives its
owner the right to purchase one share of
common stock for an exercise price of $17. The
current stock price is $26, and each warrant is
worth $10.
What is the new value of the company?
What is the new stock price?
Transcribed Image Text:The capital structure of DCF Enterprises Inc. consists of 18 million shares of common stock and 1 million warrants. Each warrant gives its owner the right to purchase one share of common stock for an exercise price of $17. The current stock price is $26, and each warrant is worth $10. What is the new value of the company? What is the new stock price?
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