Concerning Warrants and Call Options,which of the Following Statements Generally

question 17

Multiple Choice

Concerning warrants and call options,which of the following statements generally is correct?

• A)The issue procedures for both are quite similar.
• B)When a call option is exercised,the firm must issue new equity.
• C)When a warrant is exercised,existing equity changes hands.
• D)Exercise of a call option does not affect share value,but warrant exercise does.
• E)None of the above is correct.

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Definitions:

Annual Dividend

The total amount of dividend that a company pays to its shareholders in a year.

Rate of Return

A financial metric expressing the percentage of profit or loss on an investment over a specific period, serving as a key indicator of investment efficiency.

Dividends Reduction

A decrease in the amount of dividends distributed to shareholders, often indicating a change in the company's profit distribution policy or financial health.

Rate of Return

A measure of the profit or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.