When Warrants Are Exercised, the Company Goes Through an Accounting

question 42

Multiple Choice

When warrants are exercised, the company goes through an accounting process to determine the new number of shares created. This process assumes that the company:

• A)creates one new share for every warrant exercised.
• B)reduces the number of shares created by the amount of shares that can be bought in the market with the proceeds of the cash generated by the exercise of the warrants.
• C)creates one new share in the ratio of the exercise price and the current stock price.
• D)None of the above

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