1. What is SDI In Stock?

SDI (Stock Dilution Index) measures the potential dilution impact on existing shareholders. It calculates the difference between the current stock price and strike price, multiplied by the number of shares involved.

2. How Does the Calculator Work?

The calculator uses the SDI formula:

Where:

• \( Stock\ Price \) — Current market price per share ($)
• \( Strike \) — Exercise or strike price ($)
• \( Shares \) — Number of shares involved

Explanation: The equation shows the total dollar amount of potential dilution impact based on the price difference and number of shares.

3. Importance of SDI Calculation

Details: SDI helps investors understand the potential impact of stock options, warrants, or convertible securities on their ownership stake and earnings per share.

4. Using the Calculator

Tips: Enter current stock price in dollars, strike price in dollars, and number of shares. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive SDI value mean?
A: A positive SDI indicates the stock price is above the strike price, meaning the options or warrants are "in the money" and likely to be exercised.

Q2: What does a negative SDI value mean?
A: A negative SDI means the stock price is below the strike price, making exercise unlikely and dilution less probable.

Q3: How is SDI different from dilution percentage?
A: SDI measures absolute dollar impact while dilution percentage shows relative ownership reduction. Both are important for analysis.

Q4: When should SDI be calculated?
A: SDI should be calculated when evaluating companies with outstanding options, warrants, or convertible securities.

Q5: Does SDI account for time value of options?
A: No, SDI is a simple measure based on intrinsic value only. More complex models incorporate time value.