Which of the Following Is a Characteristic Difference Between a Warrant

question 366

Multiple Choice

Which of the following is a characteristic difference between a warrant and a call option?

• A) A call option will typically have a longer maturity than a warrant.
• B) Call options are issued by individuals while warrants are issued by firms.
• C) Call options can be allowed to expire while warrants cannot.
• D) Neither warrants nor call options affect firm value.
• E) Unlike warrants, when call options are exercised, the number of shares of stock outstanding increases.

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Definitions:

Direct Method

In cash flow accounting, this method itemizes major classes of gross cash receipts and payments, providing a more detailed view of a company's cash flows from operating activities.

Sale Of Land

A transaction involving the transfer of ownership of land from one party to another, typically recognized as a capital transaction in accounting.

Operating Activities

Business actions directly tied to the production and delivery of goods and services, impacting the company's cash flow.

Noncash Investing

Transactions involving investments that do not require an initial cash outlay, such as stock-for-stock mergers or asset swaps.