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 alternativsharee firm price of = VN = 12.5 1 million million = $12.50

Black Scholes formula gives value = $ 6. 64

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