When Warrants Are Converted by a Holder

question 50

Multiple Choice

When warrants are converted by a holder:

• A) debt is decreased.
• B) debt is decreased but equity also increases.
• C) only the number of shares increases.
• D) there is no impact on the company's capital structure.

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Definitions:

Artificially Scarce Good

A good that is excludable but nonrival in consumption.

Pay-Per-View

A type of television or internet broadcasting service by which a user pays to view a specific television program or event.

Artificially Scarce

A situation where the supply of a good is limited by factors other than its physical scarcity, often due to regulatory or monopolistic practices.

Excludable

Referring to a good, describes the case in which the supplier can prevent those who do not pay from consuming the good.