medium · Private Credit 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
Sign up free to see the explanation and track your rank →
More Private Credit loan-structures-instruments practice
- What is the blended interest rate paid by the borrower?
- What is the blended interest rate margin the borrower pays on the total facility?
- A fund manager is valuing a senior loan to a private mid-mar… — Under ASC 820, how is this
- A private credit fund is evaluating a 'Unitranche' loan for… — What is the borrower's expe
- Which group is the fulcrum?
- What is the indicative margin for the 'last-out' lender?
- What is the primary risk factor the lender evaluates?
- What is the most plausible reason for the 200 bps 'Non-Sponsor Premium'?