Corporations That Attach Warrants to Their Bonds Are Hoping To

question 7

Multiple Choice

Corporations that attach warrants to their bonds are hoping to:

• A) sell equity without paying flotation costs.
• B) convert the bonds into stock at a later date.
• C) reduce the cost of debt by increasing bond prices.
• D) increase the price of their shares.

---

Definitions:

Proprietorship

A business firm owned by an individual who possesses the ownership right to the firm’s profits and is personally liable for the firm’s debts.

Operational Efficiency

The capability of an organization to deliver products or services in a cost-effective manner while ensuring high quality.

Public Interest

The welfare or well-being of the general public and society as a whole.

Proprietorship

A type of business ownership where the business is owned and run by one individual who has full control and responsibility.