When a Call Option Is Exercised, New Stock Is Issued

question 58

True/False

When a call option is exercised, new stock is issued.F.23. The intrinsic value of a call option is the strike price minus the stock's price.

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Definitions:

Dividend Declarations

Official announcements by a company's board of directors to pay dividends to shareholders, specifying the dividend amount, record date, and payment date.

Retained Earnings

Profits that a company keeps or retains after paying out dividends to shareholders, used to reinvest in the business or pay down debt.

Operating Expenses

Expenses that a company incurs during its normal business operations.

Cost of Goods Sold

Direct expenditures related to the production of a company's goods, comprising both materials and labor.