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Example: If a company issues free warrants that allow shareholders to buy shares at RM0.28, and the share price rises to RM0.35, the shareholder can exercise the warrant and buy the share at RM0.28, immediately making a profit of RM0.07 per share.
5. Potential for Company Funding: When warrants are exercised, companies can raise additional funds, which can be used for various purposes, such as working capital, investment, or debt repayment.
3. Leveraging Investment: Warrants allow investors to control more shares for a smaller upfront investment, providing leverage and potentially higher percentage gains.
2. Potential for Capital Gains: If the share price rises above the exercise price of the warrant, the shareholder can exercise the warrant and buy the shares at the lower exercise price, potentially making a profit when they sell them at the higher market price.
1. Increased Equity Participation: Free warrants allow shareholders to increase their stake in the company without needing to buy additional shares at the current market price.