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

Price-yield relationship in bonds, Typically in a bond, we find...

Typically in a bond, we find an inverse relation between the price and the required yield. We know that the price of the bond is the present val

The characteristics of the website development project, P Company manufactu...

P Company manufactures and sells a range of children's clothing through its retail shops and is currently designing a website in order to allow customers to purchase products onlin

Explain the preferred stocks by equity claims, Explain the preferred stocks...

Explain the preferred stocks by equity claims. Preferred stocks are equity claims with limited ownership rights in comparison to common stocks. They differ from common stocks i

What, differentiate between pricing and allocative efficincy

differentiate between pricing and allocative efficincy

Show external business risk, Q. Show External business risk? External r...

Q. Show External business risk? External risk is the result of operating conditions imposed on the firm by circumstances beyond its control. The external environments in which

Consequence of the cash operating cycle, Q. Consequence of the cash operati...

Q. Consequence of the cash operating cycle? The cash operating cycle is the length of time among paying trade payables and receiving cash from receivables. It is able to be cal

Explain the determinants of operating exposure, Explain the determinants of...

Explain the determinants of operating exposure. Answer:  The main determinants of a company’s operating exposure are (a) The structure of the markets where the company sourc

Money market mutual fund, Money Market Mutual Fund Even as the Mutual F...

Money Market Mutual Fund Even as the Mutual Funds show a promise of becoming a major instrument of household savings, another concept which is being talked about and waiting to

Issuance of securities, Issuance of securities  : Security issues by co...

Issuance of securities  : Security issues by companies are a novel and common way of raising funds that in turn help realize their growth aspirations. It is therefore necessary

Corrective action on variance analysis, Corrective Action: Once budget ...

Corrective Action: Once budget figures are compared with those actually achieved, and a variance analysis carried out, management can then take steps to correct any problems id

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