I hold a call warrant on a stock underlying with its expiry date on 14 June. On 5 April, the underlying declared a final dividend and the ex-dividend date of the underlying falls on 29 May. The ex-dividend date of the final dividend for last year was 17 June. How does this affect the price of the warrants?

In general, the higher the dividend, the lower the price of a call warrant. It is exactly the opposite for a put warrant. In this case, assuming all other factors remain unchanged, the call warrant price will drop upon declaration of dividend on 5 April. It is because the actual ex-date (29 May) falls before the expiry date (14 June) and the dividend actually paid during the term of the warrant is higher than expected (according to historical record it was expected that such dividend would only be paid after the expiry of the warrant).

You may read further "How are the rights of a warrant holder different from the rights of a shareholder over the underlying stock?"; "What if the underlying stock eventually declared a dividend lower than expected? How about if the declared dividend is larger than expected?" and "How does the distribution of dividends of an underlying stock affect the price of a warrant or CBBC?".