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Sunday, 19 July 2015

Differences between warrants and Convertibles

Warrants
Convertibles
Warrant is a long term option to buy a specified numbers of common stock at stated price during specified period of time.
Convertibles are securities which are converted into a specified numbers of common stock at predefined time period.
The company receives extra money while exercising warrants.
No extra money is received by the company while exercising convertibles securities.
Warrants are attached with bond or preferred stock. It is not a security.
Convertibles may be the bond or preferred stock.
After exercising the warrant the securities are shown in the company’s book of account

After exercising the convertible securities, they are replaced with the preferred stock or common stock on company’s book of account.

Warrants can be sold separately by detaching from the securities.

This feature in not in convertibles.

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