Warrants give bond investors the chance to profit from the firm's upside potential, leading some to compare warrants to a long-termi call option. However, some factors distinguish warrants from call options. Which of the following statements about their differences is correct? Exerasing cali options can lead to the dilution of existing shareholders' value. Exercising warrants con lead fo the dilution of existing sharehoiders' value. Petroxy Oil Co. is issaing new five-year bonds with 17 warrants attached to each $1,000 par value bond. Petroxy out Co. wanted to issue the bonds at Dar, but a straight-debt bond (witheot warrants) woutd have required a 11.00\% coupon rate. instead, the attached warrants allow Petroxy Oi Co. to issue the bonds at par with n 6.60ww coupon. Select the straight value of the bond and the value of each warrant in the following table. (Note: Assume that the company pays annual coupons.) The consensus opinion of analysts is that Petroxy Oil Co. undervalued the warrants that it attached to its bonds. According to the analysts, is the coupon rate on Petroxy Oil Co:'s bonds too high or too low? Too high Too low Consider the following statement about warrantst