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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceA share trades at RM1.50 and its warrant at RM0.45. What is the warrant's gearing (the number of warrants that could be bought for the price of one share)?
Gearing = share price ÷ warrant price = 1.50 ÷ 0.45 = 3.33 times: for the cost of one share an investor can buy 3.33 warrants, so the warrant's percentage moves tend to be larger. 0.30 times inverts the ratio. 1.25 times divides the share price by the exercise price. 1.95 times adds the two prices. Source: SIDC Module 7 Study Outline (Jul-Dec 2026) Topic 5 Equity Markets; Bodie, Kane and Marcus, Investments, chapters on equity valuation (as at October 2026).
Inverting the gearing ratio.
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