Asked by Marco-Amar Drummond on May 05, 2024
Verified
A reverse stock split is sometimes undertaken by a firm that wishes to make its stock price more appealing to the average investor.
Reverse Stock Split
A corporate action that reduces the number of a company's outstanding shares by combining them into a smaller number of shares.
Stock Price
The cost of purchasing a share of a company in the stock market, which fluctuates based on supply and demand, company performance, and market conditions.
- Gain an understanding of the strategic rationales for the implementation of stock splits, reverse stock splits, and the repurchasing of shares.
Verified Answer
JR
Jordan RichardsonMay 06, 2024
Final Answer :
True
Explanation :
A reverse stock split reduces the number of shares outstanding, which typically increases the price per share, making the stock appear more valuable and potentially more appealing to investors.
Learning Objectives
- Gain an understanding of the strategic rationales for the implementation of stock splits, reverse stock splits, and the repurchasing of shares.