The major difference between convertible debt and detachable stock warrants is that upon exercise of the warrants: O No paid-in capital in excess of par can be part of the transaction The stock is held by the company for a defined period of time before they are issued to the warrant holder O The stock involved is restricted and can only be sold by the recipient after a set period of time O The holder has to pay a certain amount of cash to obtain the shares.
The major difference between convertible debt and detachable stock warrants is that upon exercise of the warrants: O No paid-in capital in excess of par can be part of the transaction The stock is held by the company for a defined period of time before they are issued to the warrant holder O The stock involved is restricted and can only be sold by the recipient after a set period of time O The holder has to pay a certain amount of cash to obtain the shares.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The major difference between convertible debt and detachable stock warrants is that upon exercise of the warrants:
- ○ No paid-in capital in excess of par can be part of the transaction
- ○ The stock is held by the company for a defined period of time before they are issued to the warrant holder
- ○ The stock involved is restricted and can only be sold by the recipient after a set period of time
- ○ The holder has to pay a certain amount of cash to obtain the shares.
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