Investors who hold warrants essentially have a:
A) put option on the firm's bonds.
B) put option on the firm's equity.
C) call option on the firm's bonds.
D) call option on the firm's equity.

Question

Quizplus · Accepted Answer

Investors who hold warrants have the right, but not the obligation, to buy shares of the underlying company's stock at a specific price (strike price) before a certain expiration date. This right is similar to a call option, which makes D the correct choice.

Investors Who Hold Warrants Essentially Have A