Which of the Following Is True When Warrants Are Exercised

question 57

Multiple Choice

Which of the following is true when warrants are exercised?

• A) The security associated with the warrant drops in value depending on the exercise price of the warrant.
• B) Funds are transferred from the retained earnings account to common shares account for the market value of the shares.
• C) The number of common shares outstanding changes.
• D) There is no new capital for the firm because the warrants are exchanged for the common shares.

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Definitions:

Trust

A legal arrangement in which a grantor allows a trustee to manage assets on behalf of a beneficiary.

Supreme Court of Canada

The Supreme Court of Canada is the highest court in Canada and serves as the final court of appeal in the Canadian justice system.

Authoritative Precedent

A judicial decision that is binding on lower courts within the same jurisdiction, guiding future cases with similar issues.

Manitoba Court

The judicial system or a specific court within the province of Manitoba, Canada, handling legal matters within its jurisdiction.