The firms that attach bonds to the stock warrants are usually_________?
Correct answer: B. more risky
- A. less discounted
- B. more risky
- C. less risky
- D. more discountedAccounting & Auditing
Explanation
Stock warrants are commonly attached to bonds by firms perceived as more risky, because the warrant makes the issue more attractive to investors. Stronger firms generally need less of this inducement.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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