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 what is comprehensive income, Q. Explain what is Comprehensive Inco...

Q. Explain what is Comprehensive Income? Comprehensive Income - Change in EQUITY of a business enterprise during a period from transactions and other circumstances and events f

Compute the expected stock price, 1. Using ratio analysis, compare your fif...

1. Using ratio analysis, compare your fifth year to the current year and discuss. 2. Compute the expected stock price at the end of the fifth year. Assume your stockholders hav

How to find value of zero-coupon bond?, Illustration  Find ...

Illustration  Find out the value of zero-coupon bond when maturity value is Rs.1,00,000, discounting rate is 12%, and the period is 25.  Then,

Absolute performance standard, Absolute Performance Standard is a method of...

Absolute Performance Standard is a method of measuring an organization's development and how effective and efficient it is at operating its business. The absolute performance stand

Show inter-corporate deposits, Q. Show Inter-Corporate Deposits? Inter-...

Q. Show Inter-Corporate Deposits? Inter-Corporate Deposits: Inter-corporate lending/borrowing or deposits (ICDs) is a popular short-term investment alternative for companies in

Illustrate report on cash flow budget, Q. Illustrate report on cash flow bu...

Q. Illustrate report on cash flow budget? The cash flows The principal reason why certain statistics were not included in the cash flows is that they are incremental cash

Cost of retained earning, Cost of Retained Earning: - It is on occasion arg...

Cost of Retained Earning: - It is on occasion argued that retained earnings carry no cost since a firm isn't required to pay dividend on retained earnings. Nevertheless this isn't

Explain the powers and functions of sebi, Question 1 What is liquidity ris...

Question 1 What is liquidity risk? What are the causes for liquidity risk? Question 2 Explain the powers and functions of SEBI Question 3 Discuss the various categories

Cost control strategies in organisations, 1. List the common elements of a ...

1. List the common elements of a submission for a major resource acquisition (purchase) 2. What is the difference between: A fixed asset and current asset? 3. If you worked i

Financial leverage, paid-up equty 100000 earning of the company 10000 praic...

paid-up equty 100000 earning of the company 10000 praice - earning ratio(PIE) 20 no.of equty share

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