Corporations That Attach Warrants to Their Bonds Are Hoping To

question 39

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:

Standard Labor Hours

Refer to the predetermined amount of time expected to be spent to complete a task under normal conditions.

Direct Labor Rate Variance

The difference between the actual labor rate paid to workers and the standard labor rate, multiplied by the total hours worked.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or delivering a service.

Actual Rate

The current interest rate or the actual cost rate in various financial and business contexts.