The treasury stock method will increase the number of shares outstanding whenever the exercise price of an option or warrant is below the market price of the common stock.

Question

Quizplus · Accepted Answer

The treasury stock method assumes that options or warrants are exercised and the proceeds are used to buy back shares at the current market price, increasing the number of shares outstanding if the exercise price is below the market price.

The Treasury Stock Method Will Increase the Number of Shares