Ross-Jordan Financial has suffered losses in recent years,and its stock currently sells for only $0.50 per share.Management wants to use a reverse split to get the price up to a more "reasonable" level,which it thinks is $25 per share.How many of the old shares must be given up for one new share to achieve the $25 price,assuming this transaction has no effect on total market value?
A)47.50
B)49.88
C)50.00
D)52.50
E)55.13

Question

Quizplus · Accepted Answer

To achieve a $25 price per share from $0.50 per share, a reverse split of 50 old shares for 1 new share is needed (since 50 x $0.50 = $25).

Ross-Jordan Financial Has Suffered Losses in Recent Years,and Its Stock