If the purchase price of a stock exceeds its market value, stock warrants will ____________?

A stock warrant gives the right to buy shares at a fixed price. If that price is above the current market value, using the warrant would be more expensive than buying the shares directly from the market. In such situations,... Read More

1 FINANCE MCQS

If the purchase price of a stock exceeds its market value, stock warrants will ____________?

  • Be exercised
  • Not be exercised
  • Be discounted
  • Not to be discounted
Correct Answer: B. Not be exercised

Detailed Explanation

A stock warrant gives the right to buy shares at a fixed price. If that price is above the current market value, using the warrant would be more expensive than buying the shares directly from the market. In such situations, the warrant is not exercised because it provides no financial benefit.

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