In a Reverse Stock Split

question 69

Multiple Choice

In a reverse stock split:

• A) the number of shares outstanding increases and owners' equity decreases.
• B) the firm buys back existing shares of stock on the open market.
• C) the firm sells new shares of stock on the open market.
• D) the number of shares outstanding decreases but owners' equity is unchanged.
• E) shareholders make a cash payment to the firm.

---

Definitions:

Diffuse

To spread or disperse something widely, or to be overly verbose and scattered in speech or writing.

Organizations

Entities composed of multiple individuals working together towards a common purpose or goal, structured in a specific manner.

Innovations

New ideas, devices, or methods that improve something or introduce significant positive change.

Knowing-Doing Gap

The discrepancy between what people know they should do and what they actually do in practice.