Concerning warrants and call options,which of the following statements generally is correct?
A) The issue procedures for both are quite similar.
B) When a call option is exercised, the firm must issue new stock.
C) When a warrant is exercised, existing stock changes hands.
D) Exercise of a call option does not affect share value, but warrant exercise does.
E) None of these. is correct.

Question

Quizplus · Accepted Answer

When a warrant is exercised, new shares are issued, which can dilute the value of existing shares, whereas a call option involves existing shares and does not affect the total number of shares outstanding.

Concerning Warrants and Call Options,which of the Following Statements Generally