Summary: Series 7 Study Guide Lesson 4<br> <br> <a href="https://gum.co/usMV" target="_blank" rel="noopener"></a>In this Series 7 Study Guide Lesson 4 we’ll be talking about some different types of securities which are called special securities in financial listings. These include warrants, rights, which we’ve talked about a little bit in the common stock section and ADRs which stands for American depository receipts.<br> <br> First of all, warrants are basically rights to purchase stock at specific prices that are long-term in nature. They differ from rights which tend to be short term in nature. A warrant may be issued by a company simply to raise money by selling the right to buy the common stock at a certain price. It doesn't appear on the balance sheet as equity, it is simply a warrant. Now, in calculating the earnings per share fully diluted they will take warrants into effect. But for the most part it's sort of like free money to a corporation that issues warrants. If you issue warrants and you sell these warrants to the public, you get a certain dollar amount for the warrant. Now, if at some point in time the stock underlying that warrant rises to a certain point to make that warrant valuable and people convert it into stock, then the company gets the additional equity from the purchase of the stock.<br> <br> Warrants are used as basically an enticement to people to start watching the stock and basically a warrant is a long term option to buy the stock at a specific price. Warrants quite often are attached to the sale of stock as a kicker or teaser, or a sale of a bond, or a sale of a preferred stock. It can be attached pretty much to anything. When they do that it’s called a unit. You might for instance get one common share and one warrant to buy a common share at the price of the common stock plus let's say a dollar too. For instance, a company issued some stock at $30 a share. They might attach to that stock issue a warrant or a right to buy an additional share of stock at $35 per share. This would be what is called a unit. This way, people would buy the stock. Warrants can be traded on their own and you will see listings for warrants in the financial listings of securities of negotiable securities and the financial pages. .....<br> <br> <br> Here is what my customers say about my audio lessons<br> <a href="https://www.series7podcast.com/series-7-course-review/">Testimonials</a><br> <br> <a href="https://gumroad.com/l/usMV">Loading...</a>
