Principles of Corporate Finance

(Barry) #1

United Glue Warrants


w United glue has just issued $2 million package of debt and
warrants. Using the following data, calculate the warrant
value.
w Value of warrant with dilution

Current alternativequity vale firm ue of =V = Valuetotal assets of United's - value of loans


V = 18 − 5. 5 = $ 12. 5 million

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