A Reverse Stock Split Is Sometimes Used as a Means

question 246

Multiple Choice

A reverse stock split is sometimes used as a means of:

• A) Decreasing the liquidity of a stock.
• B) Decreasing the market value per share of stock.
• C) Increasing the number of stockholders.
• D) Keeping a firm's stock eligible for trading on a stock exchange.
• E) Raising cash from current stockholders.

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Definitions:

Administrative Expenses

Administrative expenses comprise costs related to the general operation of a business that are not directly tied to production or sales, such as salaries of office staff and office supplies.

Planning Budget

A budget created at the beginning of the budgeting period that is based on planned levels of activity for the period.

Units

Basic measures or quantities of product or service in accounting, production, or inventory management.

Direct Labor

Represents the labor costs of employees who are directly involved in the production of goods or the delivery of services.