With respect to Convertible Bonds and Warrants, which of the following statements is correct?

Select one:

a. Both Convertibles and Warrants are instruments used to reduce the credit and default risk associated with lending to non-established, earlier stage companies.

b. Warrants start out as bonds (or loans) and are a form of debt capital. Once converted into equity, the requirement to repay the debt goes away completely and the holder of the warrant is now an equity investor.

c. Warrants are typically attached to bonds or credit agreements to provide a sweetener to the lender. This is done to make the loan available in the first place, and/or to reduce the interest cost on the loan.