Which of the following is correct regarding the interaction of a firm's share price and the value of issued warrants?

Question

Quizplus · Accepted Answer

The value of a warrant is derived from the value of the underlying shares, so as the market price of the shares rises, the value of the warrant also increases. This is because the warrant holder has the right to purchase shares at a set price, and as the market price of the shares rises, the warrant becomes more valuable as it allows the holder to purchase shares at a lower price than the market value.

Which of the Following Is Correct Regarding the Interaction of a Firm's