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TARP Warrants - What are they worth?

|Includes:Bank of America Corporation (BAC), C, GS, JPM, MS

Inspired by Ira Artman's Instablog on the TARP warrants and the cost to the banks to buy them back, I looked up Bank of America's warrants on their 10-K, then put the information into an options estimator at cboe.com, using yesterday's closing price and the volatility as supplied by CBOE.

Bank of America, value of 10 year warrants with stock trading at 11.73

Date Issued

Shares (millions)

Strike

Value per share

Total Value (millions)

10/14/2008

121.8

30.79

6.11

744

January 2009

150.4

13.30

8.79

1,322

Total


 


 


 

2,066

BAC received 35 billion of TARP money, out of a total 350 billion made available to eligible institutions. If the warrants received from other TARP participants are equally valuable, then there is 20 billion taxpayers are entitled to.

Stocks: BAC, JPM, C, GS, MS