Why Might a Firm Announce a "Reverse Stock Dividend

question 58

Multiple Choice

Why might a firm announce a "reverse stock dividend"?

• A)This only occurs when the firm wants its price to increase, perhaps due to listing requirements.
• B)This is impossible.
• C)This only occurs when the firm is in financial hardship and the management team wants to execute a leveraged buyout.
• D)None of these are reasons for a reverse stock dividend.

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