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Xerox is set to distribute warrants to its shareholders as part of a strategy to optimize its balance sheet. A warrant is a financial instrument that grants the holder the right, but not the obligation, to purchase company stock at a predetermined price in the future. This pro-rata distribution means that shareholders will receive warrants in proportion to their existing ownership, ensuring fairness in the allocation. While the initial distribution does not generate revenue for the company, it creates an opportunity to raise capital in the future. If the stock price rises above the exercise price, shareholders may exercise their warrants, purchasing additional shares and providing Xerox with a new influx of cash. This move gives Xerox flexibility in managing its finances without immediately diluting shareholder equity or taking on new debt.
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