A security that gives the holder the right, but not the obligation, to purchase shares of stock in a firm for a fixed price over a specified period of time is called a(n):
A) Convertible bond.
B) Warrant.
C) Initial public offering.
D) Seasoned equity offering.
E) Forward sale of equity.

Question

Quizplus · Accepted Answer

Warrants give the holder the right to buy a company's stock at a specified price before the warrant expires, but do not obligate the holder to purchase the shares.

A Security That Gives the Holder the Right, but Not