A One-For-Four Reverse Stock Split Will Increase

question 86

Multiple Choice

A one-for-four reverse stock split will increase:

• A) the par value by 25 percent.
• B) the number of shares outstanding by 400 percent.
• C) the market value but not affect the par value per share.
• D) a $1 par value to $4.
• E) a $1 par value to $5.

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Definitions:

Stock Repurchases

The act of a company buying back its own shares from the marketplace, reducing the amount of outstanding stock.

Capital Structure

The mix of different forms of funding used to finance a company's operations and growth, including debt and equity.

Income Tax

A tax levied by governments on the income generated by businesses and individuals within their jurisdiction.

Dividend Reinvestment Plan

A corporate program enabling investors to use their cash dividends to buy more or partial shares when dividends are paid out.