Which is a derivative on the company's own common shares?
A)Accounts payable.
B)Warrants on common shares.
C)Commodity futures contract.
D)Warranty provision.

Question

Quizplus · Accepted Answer

A warrant on common shares is a derivative that gives the holder the right to buy the company's own common shares at a specified price and date in the future. It is directly linked to the value of the company's underlying stock and thus can be considered a derivative on the company's own common shares. Accounts payable, commodity futures contracts, and warranty provisions are not derivatives on the company's own common shares.

Which Is a Derivative on the Company's Own Common Shares