New Zealand Rural Land Company Limited (NZL.NZX) announced a 1 for 3 pro-rata rights offer on 1 March 2023, with the offer including 1 warrant for every 3 shares subscribed.
The terms of the warrant include an American style expiry date of 30 November 2025, an exercise price of $1.20 per warrant, and expected quotation date of 23 March 2023.
NZL has consulted with valuation practitioners to determine an appropriate valuation methodology for the warrant, and a binomial pricing model was determined to be the best fit.
This model values a warrant using an iterative approach utilising multiple periods, taking into account the value associated with an investor's ability to exercise the warrant at any time prior to expiry.
Applying the binomial model to the new warrants provides an indicative value range of $0.10c - $0.13c per warrant.
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