A Reverse Stock Split Is Sometimes Used as a Means

question 39

Multiple Choice

A reverse stock split is sometimes used as a means of:

• A)decreasing the liquidity of a stock.
• B)decreasing the market value per share.
• C)increasing the number of shareholders.
• D)keeping a firm's equity eligible for trading on a stock exchange.
• E)raising cash from current shareholders.

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Definitions:

Legal Consideration

Legal consideration involves something of value that is exchanged between parties in a contract, making the agreement legally enforceable.

Lease Option

A contract that permits a party to lease real property while holding an option to purchase that property.

Real Property

Land and anything permanently attached to it, such as buildings and structures, considered immovable.

Option Contract

A contract granting the option holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified time period.