Matching
Match the following with the items below:
Premises:
Equals the market value of the common stock minus the option price of the warrant, all multiplied by the number of shares each warrant entitles the holder to purchase.
May be used as a means to offer lower interest rates on debt.
Equals the market price of a convertible bond minus the security's conversion value.
The market price of the warrant minus the warrant's intrinsic value.
Equals the conversion ratio divided into the par value.
The use of an equity option to facilitate sale of a debt security.
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities, and warrants.
The right to sell an asset for a given time at a specified price.
May be exchanged with the company, usually for shares of common stock.
Responses:
conversion premium
convertible security
warrant
minimum warrant value
financial sweetener
diluted earnings per share
conversion price
speculative warrant premium
put option
Correct Answer:
Premises:
Responses:
Equals the market value of the common stock minus the option price of the warrant, all multiplied by the number of shares each warrant entitles the holder to purchase.
May be used as a means to offer lower interest rates on debt.
Equals the market price of a convertible bond minus the security's conversion value.
The market price of the warrant minus the warrant's intrinsic value.
Equals the conversion ratio divided into the par value.
The use of an equity option to facilitate sale of a debt security.
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities, and warrants.
The right to sell an asset for a given time at a specified price.
May be exchanged with the company, usually for shares of common stock.
Premises:
Equals the market value of the common stock minus the option price of the warrant, all multiplied by the number of shares each warrant entitles the holder to purchase.
May be used as a means to offer lower interest rates on debt.
Equals the market price of a convertible bond minus the security's conversion value.
The market price of the warrant minus the warrant's intrinsic value.
Equals the conversion ratio divided into the par value.
The use of an equity option to facilitate sale of a debt security.
Adjusts earnings per share for potential share issuances related to outstanding options, convertible securities, and warrants.
The right to sell an asset for a given time at a specified price.
May be exchanged with the company, usually for shares of common stock.
Responses:
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