Warrant Valuation: Pricing Traditional and Covered Warrants
Interactive

Warrant Valuation: Pricing Traditional and Covered Warrants

Intuition Publishing
Updated Sep 24, 2020

Our discussion here outlines the methods used to price traditional and covered warrants. We have to treat the two types differently when pricing them as they have different characteristics which we outline here. We first price a covered warrant using the Black-Scholes formula, and demonstrate it using an example. We then evaluate a traditional warrant before, and at, maturity.

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