Exercise Price Homework Help

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 be acquired per warrant. Typically, the ratio is 1:1 which implies that one equity share can be purchased for each warrant.

Exercise Date

It means the date after which the option to buy shares expires, that is, the life of the warrant. Usually, the life of warrant is 5 to 10 years although theoretically perpetual warrants can also be issued.

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