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"15. Sen Corporation warrants carry the right to buy 10 shares of Sen common stock at \$3.50 per share. The common stock has a current market price of \$4.25 per share. What is the intrinsic, or minimum, value of one Sen warrant?
a.
\$.75
b.
\$7.50

c.
\$15

d.
\$0

4. A convertible bond is currently selling for \$11 335. It is convertible into 20 shares of common stock that presently sell for \$56 per share. What is the conversion premium?
__a. \$335
b.
\$215

c.
66.74 shares

d.
23.8 shares

b.
\$7.50

c.
\$15

d.
\$0
13. Jacobs and Company has warrants outstanding, which are selling at a \$3 premium above intrinsic value. Each warrant allows its owner to purchase one share of common stock at \$25. If the common stock currently sells for \$28, what is the warrant price?
a. \$6
b. \$10
__c.
\$12
__d.
\$14

12. Vickrey Technology has had net income of \$2,000,000 in the current fiscal year. There are 1,000,000 shares of common stock outstanding along with convertible bonds, which have a total face value of \$8 miIJion. The \$8 million is represented by 8,000 different \$1,000 bonds. Each \$1,000 bond pays 3 percent interest. The conversion ratio is 30. The firm is in il 30 percent tax bracket. What is Vickrey's diluted earnings per share?
a.
\$1.75

b.
\$1.81

c.
\$2.00

d.
None of the above

11.Mirrlees Corp. has 10,000 6.25 percent bonds convertible into 40 shares per \$1000 bond. Mirrlees has 600,000 outstanding shares. Mirrlees has a tax rate of 40 percent. The average Aa bond yield at time of issue was 10 percent. Compute basic earnings per share if ilfter-tax earnings are \$750,000.
a. \$0.71
b. \$1.25
__c. \$1.33
__d. \$1.51

"
Dear Student,

Again there is some confusion concerning Question 4:

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