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:

Equilibrium

a state in economics where supply equals demand, resulting in a stable market condition.

Trigger Strategy

A strategy in repeated games where a player's response is conditioned on past behavior, such as retaliating or cooperating based on the other player's previous actions.

Repeated Game

A strategic interaction that occurs multiple times, allowing players to potentially develop strategies based on past outcomes.

Price Competition

A type of competition in which companies try to attract customers by offering lower prices than their competitors.