A one-for-four reverse stock split will increase:
A) the par value by 25 percent.
B) the number of shares outstanding by 400 percent.
C) the market value but not affect the par value per share.
D) a $1 par value to $4.
E) a $1 par value to $5.

Question

Quizplus · Accepted Answer

A one-for-four reverse stock split reduces the number of shares outstanding by combining them, in this case, four shares into one. This increases the par value per share proportionally. If the original par value was $1, after the split, the new par value would be $4 per share.

A One-For-Four Reverse Stock Split Will Increase