Why Are Warrants Less Desirable Than Convertible Debentures as Financing

question 36

Multiple Choice

Why are warrants less desirable than convertible debentures as financing devices for the creation of new common stock?

• A)There is no device for forcing investors to exercise warrants
• B)The conversion of convertible securities erases debt on the balance sheet
• C)Warrants increase the equity of a firm when exercised, but there is no change in the debt
• D)All of the above

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