Mega Brands Inc MBLKF

Warrants

[Stockbagger]

Information for Warrant Holders
The number of warrants issued and outstanding remains unchanged at 243,844,000. Warrant holders will be able to acquire one (1) new post-consolidation common share in exchange for every twenty (20) warrants at an exercise price of $9.94 per common share at any time until March 30, 2015. The adjustment to the exercise price of the warrants reflects the terms of the warrant indenture.


How do you input the variables in the Black Scholes model when you it takes 20 warrants to buy 1 common share?

Strike price $9.94
Stock price $10.10
Volatility 42.5%
Days left 1358

Thanks for your help.  Do you divide the strike price by 20 and the stock price by 20?

[nerzaa]

divide both by 20 makes sense... but one thing I don't get is the exercise price used to be 0.5, shouldn't it be 10 after consolidation instead of 9.94... well, anyways... no complains from me, 6 cents is still money.