Which of the Following Is Not True Regarding Stock Warrants

question 164

Multiple Choice

Which of the following is not true regarding stock warrants?

• A)Firms issue stock warrants to the general investing public for cash or attached to bonds.
• B)Holders of a bond or preferred stock with common stock warrants attached can detach and redeem the warrants separately from the bond or preferred stock.
• C)Holders of a bond or preferred stock with common stock warrants attached receives periodic interest or preferred dividends and holds a call option to purchase common shares.
• D)U.S.GAAP and IFRS require the firm to measure the fair value of the stock warrants separately from the value of the associated bond or preferred stock and allocate the issue price between the two securities.
• E)Firms issue stock warrants to their employees for cash or attached to bonds.

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