The Issuance of One New Share of Stock to Replace

question 350

Multiple Choice

The issuance of one new share of stock to replace three outstanding shares is called a:

• A) Stock dividend.
• B) Stock split.
• C) Reverse stock dividend.
• D) Reverse stock split.
• E) Stock repurchase.

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Definitions:

Industrial Regulation

Involves government rules and policies aimed at controlling the practices, standards, and market entry of firms in specific industries to prevent unfair practices and promote competition.

X-Inefficiency

An economic concept that captures inefficiencies in a firm's operations due to factors such as a lack of competitive pressure.

Principal-Agent Problems

Issues that arise when a principal hires an agent to perform tasks, and the agent's self-interest does not align with the principal's, leading to potential conflicts.

Social Regulation

Government-imposed rules and regulations designed to protect public health, safety, and well-being, affecting how businesses can operate.