Issuing Convertible Bonds or Bonds with Warrants Is Useful for a Company

Issuing convertible bonds or bonds with warrants is useful for a company of unknown risk because:

A) risk affects the two value components of these securities in opposing ways.
B) if the firm turns out to be high risk,both the option premium and the straight bond value will be high.
C) generally only well-established,high-grade companies issue these instruments.
D) the equity value is dependent on current risks rather than future risks.
E) these securities generally carry significant restrictive covenants.

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