Warrants fundamentals and factors affecting warrant pricing
The rapid growth of the domestic stock market has contributed to the proliferation of warrant issues on the local financial scene. Although the widespread trading of local warrants only began in the late eighties, this instrument has since made its significance felt in the financial market....
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| Main Authors: | , , |
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| Other Authors: | |
| Format: | Final Year Project |
| Language: | English |
| Published: |
2015
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/63761 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | The rapid growth of the domestic stock market has contributed to the proliferation of
warrant issues on the local financial scene. Although the widespread trading of local
warrants only began in the late eighties, this instrument has since made its significance
felt in the financial market.
The objective of this study is to provide the readers with an overview of the nature of
warrants and to analyse the factors influencing warrant pricing. A survey of 24
warrants was carried out and data was collected to test the relationship between the
relevant factors and warrant prices. The statistics software "Execustat 3.0" was used
extensively in this exercise to facilitate the computation of the data in the regression
analysis.
The results of the analysis indicate that share price is the most important contributing
factor in warrant pricing, supporting the findings of studies previously done and other
valuation models. A small section was also dedicated to the examination of the factors
affecting the time value of warrant prices and the result obtained further confirmed the
importance of share price as the most important factor in valuing warrant. |
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