Corporations that attach warrants to their bonds are hoping to:
A) sell equity without paying flotation costs.
B) convert the bonds into stock at a later date.
C) reduce the cost of debt by increasing bond prices.
D) increase the price of their shares.

Question

Quizplus · Accepted Answer

Attaching warrants to bonds makes them more attractive to investors, potentially allowing the corporation to issue the bonds at a lower interest rate, thus reducing the cost of debt.

Corporations That Attach Warrants to Their Bonds Are Hoping To