medium · Private Credit & Debt loan-structures-instruments
A venture lender provides a $15M loan at 11% interest (8% cash, 3% PIK) with warrants for 0.75% of equity at a $200M entry valuation. At exit in Year 2, the company is valued at $500M.
What is the total dollar value of the warrants to the lender at exit?
- $1.80M
- $3.75M
- $2.25M
- $1.50M
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