In recent years Constable Inc.has suffered losses, 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?

Question

Quizplus · Accepted Answer

To achieve a new share price of $25 from the old price of $0.50, you divide the target price by the current price: $25 / $0.50 = 50. This means 50 old shares must be given up for one new share to reach the desired price.

In Recent Years Constable Inc