Warrants Differ from Listed Options in That

question 47

Multiple Choice

Warrants differ from listed options in that:
I. Exercise of warrants results in dilution of a firm's earnings per share.
II. When warrants are exercised, new shares of stock must be created.
III. Warrant exercise results in cash flows to the firm, whereas exercise of listed options does not.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Breach of Contract

Occurs when one party fails to fulfill its obligations under the agreement, giving the aggrieved party the right to seek remedies.

Conform to Contract

The act of meeting or complying with the terms and conditions outlined in a contractual agreement.

Good Faith

Acting with honesty and integrity in dealings, without intending to deceive or commit fraud.

UCC

Comprehensive legal guidelines for all commercial transactions in the United States are established by the Uniform Commercial Code.