KTOVW (KTOVW)

[tjguy]

Evening here, but good morning to you!

I have read up on it and I find it hard to understand.

The Black Scholes call option formula is calculated by multiplying the stock price by the cumulative standard normal probability distribution function. Thereafter, the net present value (NPV) of the strike price multiplied by the cumulative standard normal distribution is subtracted from the resulting value of the previous calculation. In mathematical notation, C = S*N(d1) - Ke^(-r*T)*N(d2). Conversely, the value of a put option could be calculated using the formula: P = Ke^(-r*T)*N(-d2) - S*N(-d1). In both formulas, S is the stock price, K is the strike price, r is the risk-free interest rate and T is the time to maturity. The formula for d1 is: (ln(S/K) + (r + (annualized volatility)^2 / 2)*T) / (annualized volatility * (T^(0.5))). The formula for d2 is: d1 - (annualized volatility)*(T^(0.5)).

The page where it shows how to figure the black scholes value gives you an answer. I think the current figure you get is 2.86 or something like that. My guess is that is current value of the warrant which means that the KTOV warrant is very undervalued right now according to that formula/model.

Is that the correct way to read the 2.86 figure?

Thanks.