When warrants are exercised,the:

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When warrants are exercised, new shares are issued, which increases the number of outstanding shares. This, in turn, dilutes the earnings per share (EPS) since the same earnings are now distributed among a larger number of shares. Hence, EPS decreases. The total equity in a firm remains constant since the new shares issued are paid for by the exercise price paid by the warrant holders. The number of bonds outstanding is not affected by the exercise of warrants.

When Warrants Are Exercised,the