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Exercise Price

Exercise Price It is the price at which the holder of a warrant is entitled to acquire the ordinary shares of the firm. Generally, it is set higher than the market price of the shares at the time of the issue. Exercise Ratio It reflects the numbers of shares that can...

Difference with Convertible Debentures

Difference with Convertible Debentures Warrants are akin to convertible debentures to the extent that both give the holder the opinion rights in the ordinary shares but there are difference between the two. While the debentures and options inseparable, a warrant can...

Evaluation

Evaluation With the invariably lower initial interest burden a growing expanding firm would be in a better position to service the debt, debentures. Subsequently, when it will do well, it can afford the servicing of the financing instrument after conversion. Secondly,...

Option Value (OV)

Option Value (OV) The investors have an option that is, they may nor exercise the right/exercise the right at a lime of their choosing and select the most profitable alternative. Thus, the option has value in the sense that the value of debenture will be higher than...

Conversion Value (CV)

Conversion Value (CV) If the holders opt for conversion, is equal to the share price maturity the conversion ratio, that is, the number of equity share offered for each debentures. If the price of share is, Rs 50 and one debenture is convertible into 5 shares...