The Meat Market has 16,000 shares of stock outstanding at a price per share of $7.What will be the price per share if the firm declares a 3-for-7 reverse stock split?

Question

Quizplus · Accepted Answer

In a 3-for-7 reverse stock split, every 7 shares are combined into 3 shares. The total value of the shares remains the same, so the new price per share is calculated by multiplying the original price by the ratio of old shares to new shares (7/3). Thus, $7 * (7/3) = $16.33.

The Meat Market Has 16,000 Shares of Stock Outstanding at a Price