Taylor's stock has plummeted in value and is currently priced at $5 a share.The firm prefers the price exceed $10 a share and thus has decided to do a reverse stock split.However, when it does this, the firm wants the stock price increased to at least twice its preferred minimum as it is concerned the price will fall further.Which one of the following stock split ratios is most appropriate for this situation?
A)1-for-3
B)1-for-4
C)2-for-7
D)4-for-1
E)7-for-2

Question

Quizplus · Accepted Answer

A 1-for-4 reverse stock split would increase the stock price to $20, which is twice the preferred minimum of $10.

Taylor's Stock Has Plummeted in Value and Is Currently Priced