When Warrants Are Exercised, The

question 256

Multiple Choice

When warrants are exercised, the:

• A) Earnings per share decrease.
• B) Earnings per share remain constant.
• C) Total equity in a firm remains constant.
• D) Total equity in a firm decreases.
• E) Number of bonds outstanding increases.

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Definitions:

Teller's Check

A check drawn by a bank on its own funds and signed by a teller, often used in situations requiring guaranteed funds.

Depository Bank

A financial institution that holds and manages securities and assets on behalf of investors, such as stocks and bonds.

Payor Bank

A bank that is responsible for paying a check or draft presented for payment.

Intermediary Bank

Any bank, other than a payor or depository bank, that transfers a check during the check collection process.