1.5 Warrants Flashcards
1
Q
A Warrant
A
A security that gives you the right to purchase shares from an issuing company at a specific price in the future
2
Q
The cost to purchase a warrant on the secondary market is called?
A
A Premium
3
Q
Strike Price
A
The specified price on a set amount of stock that the purchaser of a warrant receives
4
Q
Warrants are long or short?
A
Long
Usually 2-10 years
5
Q
What is used with new issuance of debt or equity as a sweetener to entice investors?
A
Warrants
6
Q
Intrinsic value
A
The difference between the market value of the stock and the warrants strike price
Market value - strike price
7
Q
If the current market price of the stock remains below the strike price
A
Then it’s intrinsic value is zero
CMV < SP = 0
