Bonds with Equity Warrants

question 68

Multiple Choice

Bonds with equity warrants

• A)are really the same as convertible bonds if the prestated price of exercising the warrant is the par value of the bond.
• B)can be viewed as straight debt with a call option (technically a warrant) attached.
• C)can only be exercised on coupon dates.
• D)typically are convertible as well.

---

Definitions:

Marginal Costs

The change in total cost that comes from making or producing one additional item.

MC Curve

A graph representing the marginal cost of producing each additional unit of output in a firm or economy.

Monopolist

A monopolist is a sole provider of a good or service in a market, possessing significant control over prices and market conditions due to lack of competition.

Total Costs

The complete sum of expenses for the creation of goods or the delivering of services, including both unchanging and variable costs.