Generally, Management Undertakes a Reverse Stock Split to

question 8

Multiple Choice

Generally, management undertakes a reverse stock split to

• A) send a signal to investors that the company is expected to perform poorly.
• B) meet the minimum requirements to be listed on one of the major stock exchanges.
• C) increase the liquidity of shares by decreasing the number of share available.
• D) reduce the administrative costs associated with investor relations.

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Definitions:

Regulatory Agency

A government body responsible for directing and enforcing specific regulations to ensure that standards and laws are followed within specific industries or sectors.

Restrictions

Limitations or constraints placed on activities, behaviors, or movements.

Fiscal Policy

Government policies related to taxation and spending to influence the economy.

Treasury Department

A sector of the government responsible for managing government revenue, including producing coins and bills, issuing Treasury bonds, and other financial instruments.