a.How can knowledge of call options help a financial manager to better understand warrants and convertibles?

This is what I have already. Thanks for your help.

One of the major roles of a financial manager is to maximize the shareholder wealth within a company.To do so, it is important to know how call options work with stock, warrants, and convertible securities.

A call option is a contract which gives its owners the right to buy a stock at a certain price.This could include warrants and convertibles as well; however it is important to note that there are key differences with different effects on financial statements.Warrants actually bring funds into a company where convertibles simply transfer debt to common stock.

Unlike call options, warrants do not come from the secondary markets.Warrants are newly issued shares of stock the company had previously purchased.The net impact of warrants on the financial statements are a potential decrease in the value of the equity to the call option price of the warrant.

Convertibles, unlike warrants, do not bring additional funds into a company.Debt is replaced with common stock and as a result, makes the company financially stronger which could allow for the ability to raise additional capital with potentially lower interest rates.