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 riskier.

Question

Quizplus · Accepted Answer

Adding warrants to a bond will increase its value because the holder of the bond also has the option to purchase additional shares at a fixed price, making the bond more attractive to investors. This may also potentially lower the overall interest rate on the bond. However, it may also slightly increase the riskiness of the bond because of the additional option.

Adding Warrants as a "Sweetener" to Bonds Will