The Value of Warrants

• A warrant has a theoretical value at any point in time prior to its expiration date

• The theoretical value of a warrant can be calculated as:

TVW = (Po - E) x N

• WHERE:

TVW = Theoretical value of a warrant

Po = Current market price of one share of common stock

E = Exercise price of the warrant

N = Number of shares of common stock

obtainable with one warrant

14-30

• 1994, HarperCollins Publishers

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