Warrants Differ from Options in a Number of Ways

question 43

Multiple Choice

Warrants differ from options in a number of ways.Which of the following statements about warrants and options is false?

• A) When originally issued, the life of a warrant is usually much longer than that of a call option.
• B) Warrants are usually issued by the company on whose stock the warrant is written.
• C) Warrants are often used by companies as sweeteners to make new issues of debt or equity more attractive.
• D) Warrant holders have voting rights while option holders do not.
• E) None of the above (that is, all statements are true)

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Definitions:

Warranty

A guarantee provided by the seller or manufacturer concerning the condition of its product, promising to repair or replace it if necessary within a certain period.

Incidental Damages

Compensation for unforeseen damages that occur as a secondary effect of a breach of contract.

Resell

The act of selling an item or asset previously bought, typically for profit.

Public Sale

An auction or sale of goods or assets that is open to the general public and conducted by a legal or governmental authority.