Reverse stock splits are initiated when a stock is selling at too low a price to appear respectable.

Question

Quizplus · Accepted Answer

Reverse stock splits are often used by companies to increase the price of their stock by reducing the number of shares outstanding. This is typically done when the stock is trading at a low price per share, as the company may believe that a higher price will make the stock more attractive to investors. Therefore, the statement is true.

Reverse Stock Splits Are Initiated When a Stock Is Selling