Two major differences between a warrant and a call option are
I.warrants are contracts outside of the firm while options are within the firm;
II.warrants have long maturities while options are usually short maturities;
III.warrant exercise dilutes the value of equity while options exercise usually does not
A)II and III only
B)I only
C)II only
D)III only

Question

Quizplus · Accepted Answer

II and III are correct. Warrants often have longer maturities compared to options, and exercising warrants can dilute existing shareholders' equity because it involves issuing new shares, whereas exercising options typically involves the exchange of shares already in circulation, not affecting the total number of shares outstanding.

Two Major Differences Between a Warrant and a Call Option