# Warrant Calculation. Check my work please.

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Is this right or am I way off...

Warrant price today = .2

Exercise price = 1

Time until expiration = 1 year

Current Stock price = .75

Estimated Value of Stock in 1 year = 2\$.

2\$-1\$-.2 = .8

.2 ---> .8 over 1 year

IRR 300%

Is this correct? TIA

And in general most just sell the warrant on the open market rather than exercising them with the company?

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It's .2->1 so your IRR is 400%.

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Isn't my return impacted by how much I spent on the warrants originally? .2.

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Yes, and that's your cost basis (.2). The \$1 what it should be worth in a year. You are double counting the .2 by also subtracting it from the \$1.

This is just like calculating the return for a stock; what's it worth now, what's it worth when you sell, and how much time has passed.

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Ah, of course. Thanks, fellas.

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