The purpose of a reverse stock split is to
A) increase the dividend.
B) increase the price of stock.
C) issue additional shares.
D) reduce trading activity.

Question

Quizplus · Accepted Answer

A reverse stock split is when a company reduces the number of outstanding shares and increases the price of each share. This is done to make the stock price more attractive to investors and to meet listing requirements on some stock exchanges. It does not increase the dividend, issue additional shares, or reduce trading activity.

The Purpose of a Reverse Stock Split Is to