Which of the Following Is Not a Common Feature of Financing

question 16

Multiple Choice

Which of the following is not a common feature of financing with warrants?

• A)an exercise price that is below the market price of common stock at the time the warrant is issued
• B)typical life of a warrant is between 5 and 10 years
• C)warrant is usually detachable from a debenture or preferred stock
• D)if a warrant is issued as part of a "unit," it is usually detachable from a debenture or preferred stock

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Definitions:

Disposable Income

Money that becomes available for household savings and expenditures after income taxes are subtracted.

MPS

Marginal Propensity to Save, which is the proportion of an increase in income that is saved rather than spent on consumption.

Saving

The process of setting aside a portion of current income for future use, typically in the form of investments or deposit accounts.

Disposable Income

Economic latitude for households in spending and saving after the removal of income taxes.