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DRK, Inc Currently Has 400,000 Shares of Stock Outstanding, with a a Market

Question 208

Multiple Choice

DRK, Inc. currently has 400,000 shares of stock outstanding, with a market price of $20 and a book value of $2. The firm would prefer to have its stock trade at a value between $30 and $35 per share. Of the following choices, which would allow the firm to achieve its objective?


A) A 2-for-1 stock split.
B) A 50% stock dividend.
C) A 2-for-3 reverse stock split.
D) A 1-for-2 reverse stock split.
E) A $2 per share cash dividend.

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