A One-For-Four Reverse Stock Split Will

question 45

Multiple Choice

A one-for-four reverse stock split will:

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

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Definitions:

WACC

The Weighted Average Cost of Capital is determined by calculating a firm's capital cost, with proportional weights assigned to each category of capital.

NPV

Net Present Value, a calculation used to assess the profitability of an investment by discounting future cash flows to their present value.

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity, operations, and financial health.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project.