Adding warrants as a 'sweetener' to bonds will:
A)Reduce the value of the bond
B)Increase the coupon rate of the bond
C)Increase the value of the bond
D)Make the bond more risky

Question

Quizplus · Accepted Answer

Adding warrants to bonds is typically seen as a way to make the bond more attractive to investors by providing the opportunity for additional investment gain through the eventual exercise of the warrants. This can increase demand for the bond, leading to an increase in its value. However, it is important to note that the presence of warrants can also make the bond more complex and potentially riskier for investors.

Adding Warrants as a 'Sweetener' to Bonds Will