Warrants Exercisable at $20 Each to Obtain 20,000 Shares of Common

question 48

Multiple Choice

Warrants exercisable at $20 each to obtain 20,000 shares of common stock were outstanding during a period when the average and year-end market price of the common stock was $25. Application of the treasury stock method for the assumed exercise of these warrants in computing diluted earnings per share will increase the weighted-average number of outstanding common shares by

• A) 20,000.
• B) 16,667.
• C) 16,000.
• D) 4,000.