Lester's Meat Market has 7,000 shares of stock outstanding at a price per share of $11. What will the price per share be if the firm declares a 3-for-5 reverse stock split?

Question

Quizplus · Accepted Answer

In a 3-for-5 reverse stock split, every 5 shares are converted into 3 shares. This reduces the number of shares and increases the price per share proportionally. The new price per share is calculated as (5/3) * $11 = $18.33.

Lester's Meat Market Has 7,000 Shares of Stock Outstanding at a Price