________ allow the holder to purchase a certain number of shares of the firm's common stock at a specified price over a certain period of time and are occasionally part of a debt agreement.

Question

Quizplus · Accepted Answer

Stock-purchase warrants allow the holder to purchase a certain number of shares of the firm's common stock at a specified price over a certain period of time. They are occasionally part of a debt agreement.

Option A, rights, are also similar to warrants but are typically given to existing shareholders as a way to maintain their proportional ownership in the company when new shares are issued.

Option C, debentures, are a form of debt security that typically offer a fixed interest rate and repayment schedule.

Option D, puts and calls, are options contracts that give the holder the right to sell (put) or buy (call) securities at a specific price within a specified time frame. They are not typically part of a debt agreement.

________ Allow the Holder to Purchase a Certain Number of Shares