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Please answer the following question. You can create an excel sheet or a word document...

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Accounting

Please answer the following question. You can create an excel sheet or a word document and upload the same.

Q1- Hanson Toy Co. has warrants outstanding that allow the holder to purchase 1.5shares of stock per warrant at $22 per share (option price). The common stock is currently selling for $28, while the warrant is selling for $12.25 per share.

What is the intrinsic (minimum) value of this warrant? What is the speculative premium on this warrant? What should happen to the speculative premium as the expiration date approaches?

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