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

Explain the term finance companies, Finance companies Finance companies...

Finance companies Finance companies make loans to individuals as well as corporations by providing consumer lending business lending also mortgage financing. A few of their loa

Allocation head for revenue expenditure, Q. Allocation head for Revenue Exp...

Q. Allocation head for Revenue Expenditure? All revenue expenditure is recorded in revenue allocation registers by various heads of accounts classification, The expenditure on

Strategy of financial globalization, Question 1: (a) Highlight the mai...

Question 1: (a) Highlight the main benefits which Mauritius can reap from a strategy of financial globalization. (b) What are the problems with the internationalization of

Business have a positive accounting profit, Can a business have a positive ...

Can a business have a positive accounting profit and a negative economic profit? Please explain.

Differences between hedge funds and mutual funds, Differences between Hedge...

Differences between Hedge Funds and Mutual Funds Hedge Funds are extremely flexible in their investment options because they use financial instruments generally beyond the reach

CVP analysis, What is the meaning of Breakeven point?

What is the meaning of Breakeven point?

Business venture, Project Plan for my new business venture is attached) ...

Project Plan for my new business venture is attached) 1.     Your task is to take a look at every of the operational areas of the intended business, and verify  what financial i

Active management of portfolio, Investors, who do not believe in Effi...

Investors, who do not believe in Efficient Market Hypothesis (EMH), adopt active management strategies. Such investors incur more search costs (with regard to tim

#WACC, Filer Manufacturing has 8.9 million shares of common stock outstandi...

Filer Manufacturing has 8.9 million shares of common stock outstanding. The current share price is $59, and the book value per share is $4. Filer Manufacturing also has two bond is

Determine the types of users, Determine the Types of users Investors -loo...

Determine the Types of users Investors -look at the risk of their investment, future growth and profitability. Managers / employees-have access to more information and will want

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