Which of the following is false regarding stock warrants?

Question

Quizplus · Accepted Answer

Stock warrants are not typically used to provide existing stockholders with a means of maintaining their relative level of ownership. Instead, they are often issued to attract new investors or as an incentive to investors for funding the company. When a company issues new shares, it can potentially dilute the ownership percentage of existing shareholders. Rights offerings, not warrants, are more commonly used to give existing shareholders the opportunity to purchase additional shares before the public at a discounted price, allowing them to maintain their proportional ownership in the company.

Which of the Following Is False Regarding Stock Warrants