Warrants Exercisable at $20 Each to Obtain 60,000 Shares of Common

question 49

Multiple Choice

Warrants exercisable at $20 each to obtain 60,000 shares of common stock were outstanding during a period when the average 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 shares by

• A) 60,000.
• B) 48,000.
• C) 12,000.
• D) 15,000.

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Definitions:

Quantity of Output

The total amount of a particular good or service that is produced by a firm or economy.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms in the market are making zero economic profit, indicating no incentive for entry or exit from the market.

Price Levels

An aggregate average of current prices for goods and services in the economic sector.

Output Levels

The total amount of goods or services produced by a company or country within a specific period.