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Which of the following statements is true regarding warrants?

a. Warrants received dividends when the common stock receives them
b. Warrants can be perpetual
c. Warrants are only issued by blue chip corporations
d. Warrants are guaranteed by the Options Clearing Corporation

User Raechel
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1 Answer

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Final answer:

The true statement regarding warrants is that they can be perpetual, meaning some have no expiration date and can be held indefinitely until exercised. Warrants do not receive dividends, can be issued by any corporation, and are not guaranteed by the Options Clearing Corporation.

Step-by-step explanation:

The statement among the options provided that is true regarding warrants is b. Warrants can be perpetual. Unlike options, some warrants have no expiration date, thus they can be held indefinitely until the investor chooses to exercise them. However, it is more common for warrants to have an expiration date, which is set by the issuing company.

It is not accurate that warrants receive dividends as stated in option a. Warrants do not entitle the holder to dividends; only shareholders receive dividends. As for option c, warrants can be issued by any corporation, not just blue chip companies. Lastly, option d is incorrect because the Options Clearing Corporation (OCC) guarantees options, not warrants; warrants are typically issued directly by the company and not through an exchange.

User Alan Zeino
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