Asked by Sheridan Freeman on May 09, 2024
Verified
Warrants include an implicit call option.
Warrants
Securities that grant the holder the right to purchase the company's stock at a predetermined price before a specified date.
Implicit Call Option
A feature embedded in certain financial instruments or contracts that gives the issuer the right, but not the obligation, to take some action under specified conditions.
- Comprehend the operation of convertible bonds and warrants, along with their advantages to holders.
Verified Answer
SC
Shannon ConradMay 11, 2024
Final Answer :
True
Explanation :
Warrants give the holder the right, but not the obligation, to buy a company's stock at a specified price before the warrant expires, similar to a call option.
Learning Objectives
- Comprehend the operation of convertible bonds and warrants, along with their advantages to holders.