The purpose of a reverse stock split is to
A) issue additional shares.
B) increase the dividend.
C) increase the price of stock.
D) reduce trading activity.

Question

Quizplus · Accepted Answer

The purpose of a reverse stock split is to reduce the number of outstanding shares and increase the price per share. This is usually done to make the price of the stock more attractive to investors and to meet the minimum price requirements for listing on an exchange. A reverse stock split does not issue additional shares or increase the dividend, and it may or may not reduce trading activity.

The Purpose of a Reverse Stock Split Is to