Narrow-Based Weighted Average

外汇网2021-06-19 16:24:37 109

An anti-dilution provision used to ensure that investors are not penalized when companies are undergoing additional financing or issuing new shares. A narrow-based weighted average takes into account only the total number of outstanding pferred shares for determining the new weighted average price for the old shares.

Taobiz explains Narrow-Based Weighted Average

The new weighted average price is adjusted for the pferred shareholder, thus providing protection against dilution. The narrow-based method is the most favorable for investors, as it lowers the price of the pferred shares more than other methods.

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