The USGovernment Agrees to Guarantee a Bond Issue Planned by Demurrage

The U.S.government agrees to guarantee a bond issue planned by Demurrage Associates (DA) .The value of this guarantee

A) is a subsidy to DA's equity investors.
B) equals the value of the guaranteed loan minus the value of the loan without a guarantee, is a subsidy to DA's equity investors, and equals the value of a put option on the firm's assets with an exercise price equal to the bond's promised payments.
C) equals the value of the guaranteed loan minus the value of the loan without a guarantee.
D) is a windfall gain to the buyers of the bonds.