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Finance: What is Equity Kicker? 8 Views


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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.

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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

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