# Series 7 Exam Prep 18, Rights, Warrants, and Dilution

Page: https://stenobird.com/podcast/open-exam-prep-7140559/series-7-exam-prep-18-rights-warrants-and-dilution
Text version: https://stenobird.com/podcast/open-exam-prep-7140559/series-7-exam-prep-18-rights-warrants-and-dilution.md
Podcast: [Open Exam Prep](https://stenobird.com/podcast/open-exam-prep-7140559)
Published: 2026-06-25T01:01:53+00:00
Episode link: https://open-exam-prep.captivate.fm/episode/series-7-exam-prep-18-rights-warrants-and-dilution
Audio file: https://episodes.captivate.fm/episode/c44b0990-69bc-48b9-b705-ff07dfd806eb.mp3
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Duration seconds: 183

## Resource

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - Preemptive rights give existing shareholders the ability to maintain their ownership percentage during a new share issuance. - The value of a right is calculated differently before (cum-rights, with a +1 in the denominator) and after (ex-rights) the ex-date. - Warrants are long-term instruments, often used as sweeteners, with an exercise price initially set above the current market price. - Exercising warrants causes dilution for all existing shareholders, while participating in a rights offering prevents dilution for that specific shareholder. - A common exam trap is confusing the short-term, discounted nature of rights with the long-term, premium-priced nature of warrants. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

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## Transcript

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