Warrants attached to a bond:
A) are used as sweeteners to make bond issues less attractive.
B) always increase the risk of the bond.
C) always decrease the risk of the bond.
D) all of the above.

Question

Quizplus · Accepted Answer

Warrants attached to a bond provide the bondholder with the option to purchase the company's stock at a specific price, which can decrease the risk of the bond by offering potential additional value if the company's stock performs well.

Warrants Attached to a Bond