Warrant Vs Convertibles – what are convertible securities | Investment Decisions

Warrant Vs Convertibles
What are convertible securities , warrant investment ,convertible definition ,
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Management Notes

S. No. Warrant Convertibles
1. Warrant is an derivative security that gives the holder right to purchase specified number of shares at a stated price. Convertibles are the derivative securities in the form of bond or preferred stock which can be converted into specified number of shares of common stock on investor’s choice.
2. During the exercise of warrant, additional fund is received by the company. During the exercise of convertibles, no additional fund is received by the company.
3. Warrant is detachable in nature. ie; it can be detached from security and can be sold separately. Convertible is not detachable. ie; it cannot be detached from security and cannot be sold separately.
4. Bonds or preferred stock remains on company’s book of accounts. Conversion of bonds into common stock is done. Bond or preferred stock remained is converted into common stock and removed from company’s books of accounts.
Convertible bonds are attractive to investors because¬†can be converted into specified number of shares of common stock on investor’s choice.

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