Exam 24: Warrants and Convertibles

A firm has 100 shares of equity 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 equity?

(Multiple Choice)

5.0/5

(44)

Question 41

Diamond Drill Inc.has 150,000 shares and 15,000 warrants outstanding.A warrant holder can purchase a new share of equity for five warrants and €5.00 per warrant.The equity is currently selling for €27 per share.The holder of a €1,000 face value bond can exchange the bond any time for 25 shares of equity.The conversion ratio is:

(Multiple Choice)

4.9/5

(25)

Question 42

The holders of Xenron Corporation's bond with a face value of €1,000 can exchange that bond for 35 shares of equity.The equity is selling for €22.00.What is the conversion premium?

(Multiple Choice)

4.9/5

(30)

Question 43

Diamond Drill Inc.has 150,000 shares and 15,000 warrants outstanding.A warrant holder can purchase a new share of equity for five warrants and €5.00 per warrant.The equity is currently selling for €27 per share.If the warrants are all exercised immediately,what would be the market price of the equity?

(Multiple Choice)

4.7/5

(47)

Question 44

Showing 41 - 44 of 44

The holders of Xenron Corporation's bond with a face value of €1,000 can exchange that bond for 35 shares of equity.The equity is selling for €22.00.What is the conversion premium?

Introduction to Corporate Finance

Corporate Governance

Financial Statement Analysis and Long-Term Planning

Discounted Cash Flow Valuation

How to Value Bonds and Shares

Net Present Value and Other Investment Rules

Making Capital Investment Decisions

Risk Analysis, Real Options, and Capital Budgeting

Risk and Return: Lessons From Market History

Return and Risk: The Capital Asset Pricing Model Capm

Factor Models and the Arbitrage Pricing Theory

Risk, cost of Capital, and Capital Budgeting

Corporate Financing Decisions and Efficient Capital Markets

Long-Term Financing: An Introduction

Capital Structure: Basic Concepts

Capital Structure: Limits to the Use of Debt

Valuation and Capital Budgeting for the Levered Firm

Dividend and Other Payouts

Equity Financing

Debt Financing

Leasing and Off-Balance-Sheet Financing

Options and Corporate Finance

Options and Corporate Finance: Extensions and Applications

Financial Risk Management With Derivatives

Short-Term Finance and Planning

Cash Management

Credit Management

Mergers and Acquisitions

Financial Distress

International Corporate Finance

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