Red's Electronics Has a Balance Sheet with Equity Account Values

question 75

Multiple Choice

Red's Electronics has a balance sheet with equity account values of: common stock ($1 par) of $70,500; capital surplus of $141,600; and retained earnings of $208,300.How many shares will be outstanding if the firm declares a 2-for-9 reverse stock split?

• A)5,833 shares
• B)15,667 shares
• C)18,000 shares
• D)305,750 shares
• E)317,250 shares

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Definitions:

Specific Performance

A legal remedy in contract disputes requiring the party who breached the contract to perform their obligations as originally agreed, instead of simply paying damages.

Adverse Possession

A legal principle allowing a person to claim ownership of land or property through continuous occupation over a certain period without the permission of the original owner.

Title

The lawful entitlement to possess, hold, or utilize property.

Restrictive Covenant

A clause in a contract that limits certain actions or uses of property to protect business interests or property value.