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Delivering
warrant education to expand
THE
KNOWLEDGE OF INVESTORS
Defining Over Valued, Fair Value and Under Valued
We
determine current warrant valuations as follows:
After
updating all prices and calculations, we review the leverage
calculations on all of the warrants. We are looking at
many factors, including the bottom-line leverage and the
remaining life of the warrant.
Basically:
UnderValued = a current leverage of 1:7 to 1 or higher
FairValued = a current leverage of
1:1 to 1:6 to 1
OverValued = a current leverage of less than 1:1
to 1
and/or a very short remaining life
Also,
remember, the valuations will change as the price of the common
shares and the warrants fluctuate. In fact, it is possible
for the rating to get a better as the price of the common shares
and warrants increase and the warrants to be a 'better buy' even
though at a higher price due to the relationship of the prices
of each. We realize you may be surprised that one warrant
at C$.85 is perhaps a 'better value' than when the warrant was
selling for C$.45.
Some readers may be familiar with the Black-Scholes formula for
valuing options. This formula takes into consideration,
the current price of the common shares, the exercise price of
the options or warrants, the remaining life, a volality factor
and an assumed interest rate. Currently, we feel our
valuation ratings are very accurate but we are also considering
including the Black-Scholes pricing
valuation in the future.
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Disclosure/Disclaimer Statement
PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.
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