When Warrants Are Exercised,the Company Goes Through an Accounting Process

question 14

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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Definitions:

Mixed Numbers

Quantities that combine a whole number with a fraction less than one.

Lowest Terms

The simplest form of a fraction, with both the numerator and denominator reduced to their smallest possible numbers.

Fractions

A mathematical expression representing a part of a whole, usually in the form of a numerator and a denominator.

Higher Terms

A fraction in which both the numerator and denominator have been multiplied by the same number.