Accounting

For various reasons a corporation may issue warrants to purchase shares of its common stock at specified ccounting prices that, depending on the circumstances, may be less than, equal to, or greater than the current market Updates price. For example, warrants may be issued: PAexcel Con- . 1. To existing stockholders on a pro rata basis. Access . 2. To certain key employees under an incentive stock-option plan. . 3. To purchasers of the corporation's bonds. LUS Support Instructions (a) For each of the three examples of how stock warrants are used: . (a) Explain why they are used. . (b)Discuss the significance of the price (or prices) at which the warrants are issued (or granted) in relation to (1) the current market price of the company's stock, and (2) the length of time over which Evaluations they can be exercised. . (c) Describe the information that should be disclosed in financial statements, or notes thereto, that are prepared when stock warrants are outstanding in the hands of the three groups listed above