A junior mining company issues warrants to investors as part of a unit offering. What characteristic do these warrants typically possess?

Question: A junior mining company issues warrants to investors as part of a unit offering. What characteristic do these warrants typically possess?

Answer options:

• They are short-term options giving the holder the right to sell the company's shares at a specified price. ✅ They are long-term options giving the holder the right to buy the company's shares at a specified price.
• They provide a fixed dividend payment and priority in liquidation.
• They are a form of debt that pays interest and has a maturity date.

Correct answer: They are long-term options giving the holder the right to buy the company's shares at a specified price.

Explanation: Warrants are typically long-term options issued by a company that give the holder the right to purchase the issuer's common shares at a predetermined price for a specific period, making them attractive in junior company financings.