medium · Private Equity
A mezzanine lender receives 'penny warrants' for 5% of a company's equity as part of a financing package. At entry, the equity value is $50M. At exit 4 years later, the equity value is $120M.
What is the warrant payoff at exit?
- $6.0M
- $1.0M
- $2.5M
- $3.5M
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