Forvarious reasons a corporation may issue warrants to

Assignment Help Accounting Basics

Reference no: EM13570834

Forvarious reasons a corporation may issue warrants to purchase shares of its common stock at specified prices that, depending on the circumstances, may be less than, equal to, or greater than the current market price. For example, warrants may be issued:

1. to existing stockholders on a pro rata basis

2. to certain key employees under an incentive stock-option plan

3. to purchasers of the corporation's bonds.

Questions for each of the three examples of how stock warrants are used:

(a) explain why they are used.

(b) Discuss the significance of the price (or prices) at which the warrants are issued (r granted) in relation to (1) the current market price of the company's stock, and (2) the length of tiem over which they can be exercised.

(c) Describe the information that should be disclosed in financial statements, or notes thereto, that are prepared when stock warrants are outstanding in the hands of the three groups listed above.

Reference no: EM13570834

Questions Cloud

External financing needed triumph company has total assets : archer daniels midland company is considering buying a new farm that it plans to operate for 10 years. the farm will

Suppose tapley inc uses a wacc of 8 for below-average risk : suppose tapley inc. uses a wacc of 8 for below-average risk projects 10 for average-risk projects and 12 for

Describe the flow of budget data in an organization who are : describe the flow of budget data in an organization. who are the participants in the budgeting process and how do they

Suppose a company has 350000 in current assets the : suppose a company has 350000 in current assets. the companys current ratio is 1.25 and its quick ratio is 0.8. compute

Forvarious reasons a corporation may issue warrants to : forvarious reasons a corporation may issue warrants to purchase shares of its common stock at specified prices that

Project using the country andor period given for the topics : i chose this for my individual project topic is uk polices of 1970s and 1980sproject using the country andor period

The target capital structure of qm is 37 common stock 13 : the target capital structure of qm is 37 common stock 13 preferred stock and 50 debt. if the cost ofo common equity for

Ponzi corporation has bonds on the market with 125 years : ponzi corporation has bonds on the market with 12.5 years to maturity a ytm of 7.30 percent and a current price of

Harry purchases a 7 year business asset not listed property : harry purchases a 7 year business asset not listed property on july 30 2011 at a cost of 100000. harry did not elect to

User Account

All Pages