What is the equity value of the company given the following information?
$\bullet$Current share price: $40.00
$\bullet$Basic shares outstanding: 400.0mm
$\bullet$50.0mm options outstanding with an exercise price of $20.00
$\bullet$5.0mm warrants with an exercise price of $45.00
A)$1,600.0mm
B)$1,500.0mm
C)$1,700.0mm
D)$1,625.0mm

Question

Quizplus · Accepted Answer

The equity value is calculated by multiplying the current share price by the total number of shares, including the effect of options and warrants. The options are in-the-money, so they will be exercised, adding 50mm shares. The warrants are out-of-the-money, so they won't be exercised. Thus, equity value = ($40 * (400mm + 50mm)) = $1,700mm.

What Is the Equity Value of the Company Given the Following