Numberg Corporation has a stock price of $2.5. It is expected that the company will announce a 1 for 8 reverse split. Given this information, determine the price of the stock after the reverse split.

Question

Quizplus · Accepted Answer

In a 1 for 8 reverse split, each shareholder ends up with 1 share for every 8 shares they previously held. The price of the stock is adjusted so that the value of the shareholder's investment remains the same. Therefore, the new price is $2.5 * 8 = $20.00.

Numberg Corporation Has a Stock Price of $2