In a Reverse Stock Split

question 47

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 on the open market.
• C)the firm sells new shares 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:

Packet of Rice

A pre-measured, packaged amount of rice, typically sold in a sealed bag or box.

Remaining

The portion of something that is left after other parts have been used, removed, or subtracted.

Variance

A measure of how much values in a set differ from the mean, used in statistics to represent variability within a dataset.

Random Variable

A variable whose values depend on outcomes of a random phenomenon, having a distribution that can be analyzed statistically.