Answer:
C. Buy Treasury Stock
Explanation:
The Treasury Stock Method of Calculating Diluted Earnings Per Share
This method is usually used by an organisation to determine the number of additional shares it can generate from options as well as outstanding in-the-money warrants. Once these new shares are acquired they are then used to calculate the organisation's diluted EPS
Specifically and in relations to the question, the outstanding warrants and options are used to repurchase stocks which are then converted into treasury stock. Hence, the answer that states that stock options are exercised and that the proceeds were used to buy treasury stock.
