Which of the following statements is NOT correct? Select one: a. Warrants and convertibles both...
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Accounting
Which of the following statements is NOT correct?
Select one:
a. Warrants and convertibles both have an option feature.
b. One important difference between warrants and convertibles is that warrants bring in additional funds when they are exercised, but converting convertible bonds does not bring in any additional funds.
c. The coupon rate on convertible debt is normally set below the coupon rate that would be set on otherwise similar straight debt even though investing in convertibles is more risky than investing in straight debt.
d. Convertible bonds, if converted, are more effective in modifying the capital structure of a company, compared to warrants, if exercised. Other things held constant.
e. Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual.
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