A warrant:
A) Is a put option on the assets of a firm.
B) Obligates its holder to purchase a stated number of shares of stock at a stated price on or before a stated date.
C) Requires the firm to issue new shares of stock when it is exercised.
D) Is issued by a shareholder.
E) Generally has a shorter life than either a call option or a put option.

Question

Quizplus · Accepted Answer

A warrant gives the holder the right to purchase new shares from the issuing company at a specific price before expiration, requiring the firm to issue new shares when exercised.

A Warrant