A ________ permits the firm to raise additional funds at some point in the future by selling common stock and thereby shifting the firm's capital structure to a less highly levered position.

Question

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A stock purchase warrant gives the holder the right to purchase common stock at a fixed price within a certain time frame. This allows the firm to raise additional funds by selling common stock in the future, which can be used to shift the capital structure to a less highly leveraged position. The other options, such as a put option, conversion feature or repurchase agreement, do not necessarily allow the firm to raise additional funds through the sale of common stock.

A ________ Permits the Firm to Raise Additional Funds at Some