Equity Overhang Calculator

Equity Overhang Calculator calculator can be used to determine the equity overhang in a company, which is the portion of equity that remains outstanding after accounting for dilution from stock options, warrants, and other convertible securities. This helps in understanding the potential dilution impact on existing shareholders.

Input Parameters

Calculation Results

Calculation Formula

Equity Overhang = Stock Options + Warrants + Convertible Bonds

Where:
Stock Options: Number of shares from stock options that will be converted
Warrants: Number of shares from warrants that will be exercised
Convertible Bonds: Number of shares from convertible bonds that will be converted

Results

Equity Overhang (Shares):

0

Equity Overhang (%):

0%

Equity Overhang Calculator Calculator Usage Guide

Learn how to use the Equity Overhang Calculator calculator and its working principles

How to Use the Calculator

  1. Enter the total number of shares outstanding in the company.
  2. Enter the number of stock options that will be converted into shares.
  3. Enter the number of warrants that will be exercised into shares.
  4. Enter the number of convertible bonds that will be converted into shares.
  5. Click the "Calculate" button to compute the equity overhang and its percentage.

Understanding Equity Overhang

Equity overhang refers to the portion of a company's equity that is not currently held by existing shareholders but could be issued if all dilutive securities (stock options, warrants, convertible bonds, etc.) are exercised or converted. This calculation helps investors understand the potential dilution impact on their existing holdings.

Example

Suppose a company has 1,000,000 shares outstanding. It has issued 100,000 stock options, 50,000 warrants, and 20,000 convertible bonds. The equity overhang would be calculated as follows:

  • Stock Options: 100,000
  • Warrants: 50,000
  • Convertible Bonds: 20,000
  • Total Equity Overhang: 170,000 shares
  • Equity Overhang Percentage: (170,000 / 1,000,000) * 100 = 17%

This means that if all dilutive securities are exercised or converted, existing shareholders' ownership could be diluted by 17%.