Types of warrants, Financial Management

Assignment Help:

Types of Warrants

The warrants can be classified into different types. They are:

Detachable Warrants

These warrants are issued with most debentures, like convertible or non-convertible or equity, and are immediately detachable. They are traded in the secondary market as separate instruments.

Example: M/s. Patron Engineering Construction Co. Ltd. has issued, during March 20x3, Rs.5,00,000 - 14% secured non-convertible debentures, with detachable warrants, aggregating to Rs.500 lakh.

M/s. Malavika Steel Ltd. has announced a 5.70 crore equity shares of Rs.10 each for cash at a premium of Rs.30 attached with optional tradeable warrants.

Puttable Warrants

These warrants confer a right on the investor to sell the warrant back to the company at a fixed price before the expiry of a fixed period thereby limiting his risk.

Wedding Warrants

These warrants are attached to the host debentures and can be exercised only if the host debenture is surrendered.

Naked Warrants

These warrants are issued separately and not as a part of a bond or a debenture issue. The holder has the option of converting the warrant into debt or equity or some other asset of the issuer.

 


Related Discussions:- Types of warrants

Investment decision and cost of capital, INVESTMENT DECISION AND COST OF CA...

INVESTMENT DECISION AND COST OF CAPITAL In Finance, investment decision is disclose the allocation of funds in fixed assets or long term. This decision is also known as capita

Debentures, A 16% debenture of R5 000 is redeemable at a premium of 10% aft...

A 16% debenture of R5 000 is redeemable at a premium of 10% after 5 years. The fair rate of return on similar debentures is 14% before tax. Calculate the present value of the capit

What are the benefits of traditional approach, What are the benefits of Tra...

What are the benefits of Traditional approach Traditional approach had a very narrow perception and was devoid of an integrated conceptual and analytical framework. It had pre

find the worst case npv and probability, Question 1 What are the tota...

Question 1 What are the total cash inflows for project A? Discount rate (%)                      NPV of A (Rs.) 0

Compare and contrast mutual and stockholder, Compare and contrast mutual an...

Compare and contrast mutual and stockholder-owned savings and loan associations. A few savings and loan associations are owned by stockholders, just like commercial banks and ot

Calculate current cash debt coverage ratio, Calculate Current cash debt cov...

Calculate Current cash debt coverage ratio: Financial statements for Delta Company are presented below:   Delta Company Balance Sheet December 31, 2012

Hedge funds, Hedge Funds: Hedge Funds are investment partnerships that ...

Hedge Funds: Hedge Funds are investment partnerships that strive for above average returns through active portfolio management and whose primary compensation is a percentage of

Internal rate of return (irr), Internal Rate of Return (IRR) : This rat...

Internal Rate of Return (IRR) : This rate attempts to find the earnings rate, which equates the current value of the streams of earnings to the investment outlay. IRR is descri

State the economic conditions of cost of capital, State the economic condit...

State the economic conditions of cost of capital General economic conditions These include demand for and supply of capital within the economy and level of expected inflatio

Criticism of profit maximization approach, Criticism of Profit Maximization...

Criticism of Profit Maximization Approach: (i) Ambiguous: - One practical complexity with this approach is that the term profit is ambiguous. Different people take dissimilar me

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd