ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

Finance: What is Equity Kicker? 8 Views


Share It!


Description:

What is Equity Kicker? An Equity Kicker is an added incentive for a preferred stock or bond offering in the form of a warrant or option to purchase stock at a particular strike price or for conversion to equity rights. D.H. Blair was particularly renowned for equity kickers in their investment banking deals during the 1990s.

Language:
English Language

Transcript

00:00

Finance allah shmoop what is an equity kicker It's that

00:07

it's hiked it's up It's good Okay yeah You knew

00:10

we were going to start their well in finance Land

00:13

and equity kicker is usually a deal sweetener for debt

00:17

or lenders So shmoop akane valley bank loans whatever Dot

00:21

com five million bucks at eight percent interest but with

00:24

a catch and not a football catch get down The

00:27

bank doesn't feel that eight percent is enough to cover

00:30

the risk and well other craft that whatever dot com

00:33

brings with it they ain't google So in addition to

00:35

the eight percent interest shmoop akane valley bank wants an

00:39

equity kicker in the form of us A three percent

00:43

warrant coverage That is they want three percent of the

00:46

value of the loan of five million bucks or one

00:49

hundred fifty thousand shares or warrants to buy a share

00:53

It's like a really cheap price The option of whatever

00:55

dot com thrown in as part of the deal those

00:58

one hundred fifty thousand shares our equity and they kick

01:02

the debt deal to potentially be worth a lot more

01:05

Should things go well at whatever dot com but yeah 00:01:09.099 --> [endTime] We're not hopeful

Up Next

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Related Videos

Fake News
11939 Views

How do you tell fake news from real news?

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...