Which Two of the Following Are the Best Justifications for a Reverse

question 2

Multiple Choice

Which two of the following are the best justifications for a reverse stock split?
I.combine a reverse stock split with a stock repurchase to enable a firm to go dark
II.increase the respectability of the stock
III.avoid delisting
IV.reduce transaction costs for shareholders

• A)I and II only
• B)I and III only
• C)II and III only
• D)II and IV only
• E)III and IV only

---

Definitions:

Pension Plan

A financial program set by an employer to provide retirement income to employees.

Contractual Agreement

A legally binding contract that outlines the terms and conditions between parties.

Bond Financing

Raising capital for a business or governmental entity through the issuance of bonds, which are debt securities that must be repaid with interest.

Owner Control

The level of power and authority held by the owner(s) of a business in making significant decisions about its operations.