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Dear Mike,
Please kindly advise where is the number 2,400,000 from? (question is from eg3 of chapter 21)
Thank you!
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Ah! It seems I got it!
Exercise price ($4) is lower than mid market price ($5). If all 3,000,000 are exercised, they worth $12,000,000. While in the market, $12,000,000 could buy 2,400,000 shares.
That’s it! When doing that working, it makes sense to work from top left, move horizontally to the right, drop down a line and then move horizontally to the left.
If you were to draw a continuous line, it would look like a sausage without its left end!
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Haha, it’s like letter “U” laid sidewards left. Thank you for your vivid explanation!
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