Reverse stock splits can be used to

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Reverse stock splits are often used to avoid delisting from a stock exchange. When a company's stock price falls below a certain level, it becomes at risk of being delisted. A reverse stock split reduces the number of outstanding shares, thereby increasing the stock price per share. This may help the company regain compliance with listing requirements and avoid delisting. Reverse stock splits do not increase either the total equity of a firm or the excess cash held by a firm. They also do not adjust the debt-equity ratio or increase the number of shares outstanding.

Reverse Stock Splits Can Be Used to