A Firm Has 600 Shares of Stock and 100 Warrants

Multiple Choice

A firm has 600 shares of stock and 100 warrants outstanding.Assume the warrants are all exercised.The market value of the firm's assets is $25,000 and the market value of its debt is $8,000.Each warrant grants its owner the right to buy one new share at $27.50.What is the gain on one warrant?

A) $.87
B) $.79
C) $.25
D) $.38
E) $.71