Rights versus Warrants - Series 7 Exam Prep, SIE Exam & Series 65 Exam Prep too! - Series 7 Guru скачать в хорошем качестве

Rights versus Warrants - Series 7 Exam Prep, SIE Exam & Series 65 Exam Prep too! - Series 7 Guru

Watch Equity Lecture next    • Series 7 Exam Prep Equity Securities Lectu...   Time stamps: 00:00 Rights versus warrants intro 1:12 Outstanding shares of 2,000,000 1:26 Current market price of Worldwide Widgets is $54 per share 1:54 Issuing an additional 1,000,000 shares 2:35 Pre-emptive right is the right of the existing shareholders to maintain proportionate ownership 3:23 Existing shareholders have the "first right of refusal" on the issuance of new shares 3:56 Rights offering to the existing shareholders is the mechanism used 4:13 However many shares an existing shareholder has that is how many rights they have. For example, if I have 200,000 shares I have 200,000 rights. 2 rights needed to get an additional share 4:58 Subscription price is less than the current market price. In this example, current market price is $54 per share and the subscription price is $50 per share 6:54 Shareholder decides to exercise rights send rights and cash to the rights/transfer agent and they will have maintained proportionate ownership 8:13 Theoretical value of a right trading with the stock is market price 54 minus subscription price $50 divided by number of rights needed + 1. (54-50) divided (2+1)=$1.33 10:00 Theoretical value of right trading in the secondary market or traded EX is CMP minus subscription price divided number of rights needed (54-50) divided by 2 = $2 11:37 Standby underwritings are used in a rights offering to make shares get distributed 12:53 RIGHTS ARE SHORT TERM AND EXERCISABLE BELOW CMP 13:40 Warrants 13:43 Units are more than one security offered together or bundled. Hoping at some point in the future the securities trading separately are worth more than what you paid for them together 14:46 Typically a unit would be preferred stock or bonds with warrants as a sweetner 16:32 Warrants are exercisable above the current market price 17:20 Warrants are long term 18:17 Warrants now can be trading separately 20:00 WARRANTS ARE LONG TERM AND EXERCISABLE ABOVE THE CMP 20:48 exercise of rights or warrants provide additional equity financing to the issuer