A reverse stock split is defined as:
A)an increase in the number of shares outstanding that does not affect owners' equity.
B)a firm buying back existing shares of its stock on the open market.
C)a firm selling new shares of stock on the open market.
D)a decrease in the number of shares outstanding that does not affect owners' equity.
E)a decrease in both the number of shares outstanding and the price per share.

Question

Quizplus · Accepted Answer

A reverse stock split is when a company reduces the number of outstanding shares by combining multiple shares into one. This results in a decrease in the number of shares outstanding without affecting the total value of owners' equity.

A Reverse Stock Split Is Defined As