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Intrinsic value

Intrinsic value One of the components of a warrant premium

The warrant premium is the sum of two values: the intrinsic value and the time value. On the expiry date, the time value is zero, and thus the value of the warrant is equal to its intrinsic value.

The intrinsic value is calculated by subtracting the exercise price from the current price of the underlying security and multiplying the result by the exercise ratio.

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