Numberg Corporation Has a Stock Price of $2

question 73

Multiple Choice

Numberg Corporation has a stock price of $2.5. It is expected that the company will announce a 1 for 8 reverse split. Given this information, determine the price of the stock after the reverse split.

• A) $0.31
• B) $1.25
• C) $20.00
• D) $25.00
• E) $50.00

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Definitions:

Market Entry

The process or strategy by which a company enters a new market, facing and overcoming barriers to entry.

Market Price

the current price at which a good or service can be bought or sold, determined by supply and demand forces in the market.

Average Total Cost

The sum of fixed and variable production costs divided by the total amount of produced goods.

Long-run

A time period in which all factors of production, including capital, are variable, allowing full industry adjustment.