warrant

Since the company is the writer of the call option on stocks, the company gets paid (the warrant buyer will pay the price of warrant = w as premium) and hence I expected the market cap to increase by Mw (M = number of warrants). But instead, the chapter says the market cap is reduced by Mw. Is...

Learning objectives: Compute the value of a European option using the Black-Scholes-Merton model on a non-dividend-paying stock. Compute the value of a warrant and identify the complications involving the valuation of warrants. Define implied volatilities and describe how to compute implied...