What were the effects of the warrants on finsbury additional

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Problem 1: On November 2, year 3, Finsbury, Inc. issued warrants to its stockholders giving them the right to purchase additional $20 par value common shares at a price of $30. The stockholders exercised all warrants on March 1, year 4. The shares had market prices of $33, $35, and $40 on November 2, year 3, December 31, year 3, and March 1, year 4, respectively. What were the effects of the warrants on Finsbury's additional paid-in capital and net income?

A. Additional paid-in capital: Increased in year 4 Net income: No effect

B. Additional paid-in capital: Increased in year 3 Net income: No effect

C. Additional paid-in capital: Increased in year 4 Net income: Decreased in year 3 and year 4

D. Additional paid-in capital: Increased in year 3 Net income: Decreased in year 3 and year 4

Reference no: EM132773686

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