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Ross. Westerfield. Jaffe. Jordan Chapter 24 Test

Ross. Westerfield. Jaffe. Jordan Chapter 24 Test - CHAPTER...

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24-1 CHAPTER 24 Warrants and Convertibles Multiple Choice Questions: I. DEFINITIONS WARRANT b 1. A warrant gives the owner: a. the obligation to sell securities directly to the firm at a fixed price for a specified time. b. the right to purchase securities directly from the firm at a fixed price for a specified time. c. the obligation to purchase securities directly from the firm at a fixed price for a specified time. d. the right to sell securities directly to the firm at a fixed price for a specified time. e. None of the above. Difficulty level: Easy WARRANT d 2. Warrants are most often issued in combination with: Difficulty level: Easy WARRANT c 3. An "equity kicker" most often refers to a: Difficulty level: Easy WARRANT c 4. Warrants are similar to traded options except: Difficulty level: Medium
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24-2 VALUE OF WARRANTS e 5. BrightView Windows issued warrants with an exercise price of $17. BrightView's common stock currently sells for $20 per share. The warrants are: a. in the money. b. out of the money. c. valuable. d. not very valuable. e. Both A and C. Difficulty level: Medium II. CONCEPTS VALUE OF WARRANT d 6. Warrants are similar to options, in that the value of the warrant is limited by: Difficulty level: Medium WARRANTS AND CALL OPTIONS b 7. Which of the following would not describe the difference between warrants and call options? Difficulty level: Easy WARRANTS AND CALL OPTIONS e
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