Completely predictable and fully anticipated? Step ups in warrant exercise prices
Some warrants are issued with a scheduled increase in their exercise price. This increase, referred to as a 'step up' in exercise price, occurs after the warrant is issued but prior to its expiration. The price behaviour of warrants and common stock at the scheduled step up date is examined. The evidence suggests that the market correctly anticipates this event, and that warrant holders exercise (actually, refrain from exercising) rationally.
Year of publication: |
2005
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Authors: | Garcia-Feijoo, Luis ; Howe, John ; Su, Tie |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 12.2005, 9, p. 561-565
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Publisher: |
Taylor & Francis Journals |
Saved in:
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