medium · Private Credit & Debt loan-structures-instruments
A venture debt lender provides $15.0 million at an 11.0% total coupon (8.0% cash + 3.0% PIK) with a 3-year maturity.
If the lender also receives warrants for 0.75% of equity at a $200.0 million valuation, and the company exits at a $500.0 million valuation, what is the value of the warrants at exit (ignoring dilution)?
- $3.90 million
- $1.50 million
- $2.25 million
- $3.75 million
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