Which of the following statements is most correct: a) One important difference b

Question

Which of the following statements is most correct:

a) One important difference between warrants and convertibles is that convertibles bring in additional funds when they are converted, but exercising warrants does not bring in any additional funds.

b) One important difference between warrants and convertibles is that warrants bring in additional funds when they are exercised but converting bonds does not bring in any additional funds.

c) Both convertible bonds and warrants bring new equity capital into the firm when converted or exercised.

d) Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual.

e)none of the above

Explanation / Answer

Option D

These days all warrants are detachable.

Bond with attached warrants is sold, the warrants can be detached from the bond

Warrants are traded separately from the bond

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