When warrants are exercised, ________.
A) only the number of common shares outstanding increases
B) debt is increased
C) both debt and equity are reduced
D) there is no effect on the firm's capital structure

Question

Quizplus · Accepted Answer

When warrants are exercised, only the number of common shares outstanding increases. This means that the equity portion of the firm's capital structure increases, but there is no effect on debt.

When Warrants Are Exercised, ________