Sitting duck,I dont think Black & Scholes is appropriate for...

Sitting duck,

I dont think Black & Scholes is appropriate for valuing HDRs warrants. B&S assumes a random walk. ie shares go up or down randomly each day according to the volatility. This is not the case for HDR. HDR will go up or down a massive amount next week based on Banda. Its not a random walk, more of a Banda waltz.

This is how I am valuing the warrants. I bought some more HDRWMBs today in a fit of greed:

http://home.mindspring.com/~smstuart/myfiles/hdrwma.xls

Sorry I don't have time to upload my new version but you can easlily update this spreadsheet yourself to come up with a valuation for the B's based on your own optimism or pessimism.