Enterprise & Equity Value
What are penny warrants, and how do you treat them in the diluted share count?
Model answer
Penny warrants are warrants with a nominal exercise price (e.g., $0.01), often issued to lenders, sponsors, or in restructurings as an equity kicker. Because the strike is essentially zero, TSM gives…
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More from Enterprise & Equity Value
- What's the difference between enterprise value and equity value?
- Why do you subtract cash when going from equity value to enterprise value?
- Why is enterprise value capital-structure neutral but equity value is not?
- A company issues $100 of new debt and holds the cash on its balance sheet. What happens to EV and equity value?
- Which valuation multiples pair with enterprise value vs. equity value, and why?
- How do you calculate fully diluted shares?
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