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Anonymous CFO

Does anyone have an Excel model that calculates the fair value of the down round price protection of a preferred stock?

Asked on May 9, 2013

ASC 815 40 (EITF 07-5) requires that the ratchet provisions (i.e down round price protection) of a security be bifurcated, fair valued and recorded as a liability. Does anyone have (or know of) an Excel model that can calculate the fair value of the down round price protection/ratchet provisions of a preferred stock offering?

Answers

Mark Stokes CFO • March 21, 2011

Try this: https://www.proformative.com/resources/anti-dilution-calculations-full-ratchet-broad-based-weighted-average-models. Both an excel model and the references behind it.

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