warrants

Warrants The type of security that entitles the holder to buy a proportionate amount of common stock or preferred stock at a specified price for a period of years. Warrants are usually issued together with a loan, a bond or preferred stock - and act as sweeteners, to enhance the marketability...

This chapter describes the basic features of warrants and convertibles. The important questions are: How can warrants and convertibles be valued? What impact do warrants and convertibles have on firm value? What are the differences between warrants, convertibles, and call options? Under what...