Asked by Samdup Dolma on May 10, 2024
Verified
To meet stock exchange requirements is a valid reason for a reverse stock split.
Stock Exchange Requirements
Stock exchange requirements refer to the set of rules and standards that companies must meet and maintain to have their shares listed and traded on a particular stock exchange.
Reverse Stock Split
A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the company's valuation.
- Comprehend the tactical motivations for executing stock splits, reverse stock splits, and buying back shares.
Verified Answer
JE
Jerton EvansMay 16, 2024
Final Answer :
True
Explanation :
A reverse stock split can be used to meet stock exchange minimum share price requirements, helping a company avoid delisting.
Learning Objectives
- Comprehend the tactical motivations for executing stock splits, reverse stock splits, and buying back shares.