Question

12.) Which feature below is NOT a sweetener?

		call feature
		warrants
		conversion feature
		put feature

13.) Suppose Congress increases corporate tax rates next year to 55%. The likely effect (if other factors don't change) is a decrease in the firm's cost of debt.

True

False

14.) A funding component is

		the total funding required for a specified decision point
		a long term source of capital
		a collateral agreement, such as pledging an asset as security for a morgage bond
		an ancillary requirement on a loan that affects its risk, such as a restrictive covenant

Answer 1

IF ANY QUERY, FEEL FREE TO ASK Solution 12 Sweetner are additional benefit to capital raising instrument. These give additional benefit in form of warrant, right in form of conversion or calling some security at pre-specified price lower than market price (call option). These are generally used when it is hard to raise capital in market. Hence, on the basis of above discussion 4th option put feature is NOT a sweetner. Note : We are allowed to answer only one question, kindly put other question in separate post.