Final answer:
Warrants are the financial instruments among the given options that do not pay dividends. Dividends are payments made to shareholders as a part of a company's profits, whereas warrants are rights to purchase stock but do not provide ownership or dividends unless exercised. The correct option is d. Warrants
Step-by-step explanation:
Among the options listed, all pay dividends except for d. Warrants. Let's explore why this is the case:
- Common Stock represents ownership in a corporation and entitles the holder to a share of the company's profits, which are often distributed in the form of dividends.
- Preferred Stock is a type of equity that has a higher claim on assets and earnings than common stock, and typically pays fixed dividends.
- ADRs (American Depository Receipts) are certificates issued by U.S. banks that represent shares in foreign stocks, enabling these shares to be traded in U.S. markets. These can also pay dividends if the underlying foreign corporation declares dividends.
- Warrants, on the other hand, are a financial instrument that gives the holder the right to purchase a company's stock at a fixed price before a certain date but does not confer any ownership or dividends until exercised and converted into shares.
Dividends are a direct payment from a firm to its shareholders and represent a portion of the company's profits. They are a way for investors to receive a return on their investment, aside from potential capital gains gained from selling the stock at a higher price than it was purchased. The correct option is d. Warrants