Corporate Finance Study Set 12

Business

Quiz 25 :

Warrants and Convertibles

Quiz 25 :

Warrants and Convertibles

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The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. The conversion price is:
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B

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The holders of Mikayla Corporation's bond with a face value of $1,000 can exchange that bond for 30 shares of stock. The stock is selling for $25.00. What would the conversion price and conversion ratio be if Mikayla had a 4 for 1 stock split?
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B

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A warrant gives the owner:
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B

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The exercise of warrants creates new shares which:
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Which of the following would not describe the difference between warrants and call options?
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Diamond Drill Inc. has 150,000 shares and 15,000 warrants outstanding. A warrant holder can purchase a new share of stock for five warrants and $5.00 per warrant. The stock is currently selling for $27 per share. If the warrants are all exercised immediately, what would be the market price of the stock?
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A firm has 100 shares of stock and 40 warrants outstanding. The warrants are about to expire, and all of them will be exercised. The market value of the firm's assets is $2,000, and the firm has no debt. Each warrant gives the owner the right to buy 2 shares at $15 per share. What is the price per share of the stock after dilution?
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If a corporate security can be exchanged for a fixed number of shares of stock, the security is said to be:
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The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. The conversion ratio is:
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Warrants are most often issued in combination with:
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The holders of Mikayla Corporation's bond with a face value of $1,000 can exchange that bond for 30 shares of stock. The stock is selling for $25.00. What is the conversion premium?
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Diamond Drill Inc. has 150,000 shares and 15,000 warrants outstanding. A warrant holder can purchase a new share of stock for five warrants and $5.00 per warrant. The stock is currently selling for $27 per share. If all warrants are exercised, what will your fraction of ownership be if you owned 20,000 shares originally?
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Concerning warrants and call options, which of the following statements generally is correct?
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Diamond Drill Inc. has 150,000 shares and 15,000 warrants outstanding. A warrant holder can purchase a new share of stock for five warrants and $5.00 per warrant. The stock is currently selling for $27 per share. What would your gain be from exercising the warrants, assuming all are exercised?
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BrightView Windows issued warrants with an exercise price of $17 for one share per warrant. On May 1, BrightView's common stock is at $20 per share. The lower and upper limits on the warrant value on May 1 are:
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Which of the following would harm the position of a warrant holder?
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An "equity kicker" most often refers to a:
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The holders of Mikayla Corporation's bond with a face value of $1,000 can exchange that bond for 30 shares of stock. The stock is selling for $25.00. What is the conversion price?
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The holders of Xenron Corporation's bond with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $22.00. What is the conversion price?
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The holder of a $1,000 face value bond has the right to exchange the bond anytime before maturity for shares of stock priced at $50 per share. The $50 is called the:
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