You Currently Own 200 Shares of Stock Valued at $6

question 44

Multiple Choice

You currently own 200 shares of stock valued at $6 per share.If the firm declares a 1-for-4 reverse stock dividend you will own ____ shares valued at ___ per share.

• A) 800; $6
• B) 800; $1.50
• C) 50; $6
• D) 50; $24

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Definitions:

Rises

An increase, typically referring to prices, quantities, or levels in an economic context.

Immediate Market Period

The length of time during which the producers of a product are unable to change the quantity supplied in response to a change in price and in which there is a perfectly inelastic supply.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded, often referred to as the market-clearing price.

Equilibrium Quantity

(1) The quantity at which the intentions of buyers and sellers in a particular market match at a particular price such that the quantity demanded and the quantity supplied are equal; (2) the profit-maximizing output of a firm.