Compared to a company that issues convertible debt, a company that issues an equivalent combination of conventional bonds with warrants attached will have:（）
A. greater interest expense and lower total assets.
B. lower interest expense and higher total assets.
C. greater interest expense and greater equity.
参考答案：C
解析：
Interest expense for bonds with warrants attached is higher because the value of the warrants is treated as equity and the bond portion as if it were issued at a discount. The cash interest plus the amortization of the discount will be greater than the (cash) interest expense for the convertible bonds. Since the discounted liability will be smaller and assets are the same (at issuance), equity is greater for the bonds with warrants attached. Another way to think about this is that the estimated value of the warrants is added to equity, whereas the value of the conversion option on convertible bonds is not.