Phil has researched TLM Technologies and believes the firm is poised to vastly increase in value. He wants to invest in this company. Phil has decided to purchase TLM Technologies bonds so that he can have a steady stream of interest income. However, he still wishes that he could share in the firm's success along with TLM's shareholders. Which one of the following bond features will help Phil fulfill his wish?

Question

Quizplus · Accepted Answer

A warrant is a type of bond feature that gives the holder the right to purchase a specified number of shares of the issuer's common stock at a predetermined price before the expiration date. This allows the bondholder to share in the company's success along with the shareholders. Therefore, a warrant is the best option for Phil to fulfill his wish of sharing in the success of TLM Technologies.

Phil Has Researched TLM Technologies and Believes the Firm Is