Explain the impact of the time value premium

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When issuing convertible bonds or bonds with warrants attached, the company can change the exercise price of the (embedded) warrants. If it increases the exercise price, will the cost of debt go up or down? Explain the effect step by step, thus what happens to the Time Value Premium if it increases the exercise price, then explain the impact of the Time Value Premium on..., etc.

Reference no: EM132504016

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