Final answer:
If a stock warrant is not exercised by the expiration date, it becomes worthless, and the investor's opportunity to buy the stock at the specified price is lost. The investor may still profit from dividends or selling shares at a higher price than the purchase price, realizing a capital gain.
Step-by-step explanation:
When an investor holds a stock warrant that reaches its expiration date without being exercised, the warrant becomes worthless and the investor's right to purchase the underlying stock at the specified price ceases. This is similar to an option; if it is not exercised by the expiration date, it expires with no value and the investor does not receive a return on that specific investment. However, it is important to note that the investor still has the potential to make a profit through other means, such as receiving dividends if the company distributes them or by realizing a capital gain from the sale of any shares of stock the investor may own. If an investor had bought a share of stock in Wal-Mart for $45 and sold it later for $60, they would have realized a capital gain of $15.