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- Warrants are usually attached with the bonds or preference shares to attract the investor. The objective is to induce the potential investors to subscribe to either bonds or preferred stocks, which give less attractive returns.
- Warrants are of different types, namely, Detachable Warrants, Puttable Warrants, Wedding Warrants and Naked Warrants.
- Convertible bond is a corporate bond with a call option to buy common stock of the issuer. The number of shares of common stock that the bondholder can receive from exercising the call option of the convertible bond is called the conversion ratio.
- Convertible bonds are also of different types such as callable bonds and puttable bonds. A callable bond is a convertible bond with a favorable feature of call option available to the issuer. In the case of a puttable bond, the investor acquires a right to exercise his option at a predetermined price and time.
- A Floating Rate Note (FRN) is a bond issued for medium to long-term, which pays coupons that are pegged to the level of a certain floating index, which is called reference index.