A warrant is an option to purchase shares of stock at a fixed price. It gives the holder the right, but not the obligation, to buy shares from the issuing company. Warrants are often attached to bonds or preferred shares to make the securities more attractive to investors. The warrant specifies the number of shares that can be purchased, the exercise price, and expiration date. Warrant holders do not receive dividends or have voting rights until the warrant is exercised to purchase actual shares. The value of a warrant is determined by factors such as the current share price, exercise price, risk of the underlying shares, and time remaining until expiration.