Use the following table to indicate whether the characteristic listed refers to convertible bonds or to stock warrants:
| Characteristic |
Convertible Bonds |
Debt with Warrants |
| These fixed-income securtities remain as liabiltites on the company's books after they are exercised. |
|
|
| These fixed-income securtities are exchanged for common stock and removed as liabilties from the company's books |
|
|
| These securitites tend to have higher flotation costs |
|
|
| These securitites tend to be issued by larger, less risky firms |
|
|
2. If a firm experiences rapid growth subsequent to converitble or bond-with-warrant issues, does that make it more or less likely that the securtites will be converted or excercised?