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.

---

Definitions:

Modern Phenomenon

A trend, behaviour, or situation that is characteristic of contemporary society or recent times.

Central Americans

People originating from or living in the Central American region, which includes countries like Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, Belize, and Panama.

Large Gathering

An event where a significant number of people come together, which can be for various purposes such as celebrations, protests, or meetings.

Smoking

The act of inhaling and exhaling the smoke of burning tobacco or other substances, often associated with health risks.