Which one of the following reduces the number of shares outstanding but does not change a firm's total equity?
A)Stock split
B)Distribution
C)Reverse split
D)Liquidation
E)Redemption

Question

Quizplus · Accepted Answer

A reverse split combines multiple shares into a single share, reducing the number of shares outstanding while maintaining the same total equity. A stock split increases the number of shares outstanding and typically reduces the stock price per share proportionally. Distribution, redemption, and liquidation all involve a change in the firm's total equity.

Which One of the Following Reduces the Number of Shares