Liquid Farms Is Considering a 1-For-2 Reverse Stock Split

question 16

Multiple Choice

Liquid Farms is considering a 1-for-2 reverse stock split. Its stock is currently selling for $10 per share. Liquid plans to pay a dividend equal to $0.40 per share after the split. But, it would like to pay an equivalent dividend per share even if the split does not take place. What should the per share dividend be if Liquid doesn't split the stock?

• A)$0.40
• B)$0.20
• C)$0.80
• D)$4.00
• E)$2.00

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