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Andre45 [30]
3 years ago
6

The Meat Market has 16,000 shares of stock outstanding at a price per share of $7. What will be the price per share if the firm

declares a 3-for-7 reverse stock split?
Business
1 answer:
Alekssandra [29.7K]3 years ago
4 0

Answer:

The price will be $16.33.

Explanation:

In finance, a reverse stock split is a method where shares are merged to form a smaller number of proportionally more valuable shares. A reverse stock split is also called a stock merge.

If the reverse stock is 3-for-7, that means for every 7 shares an investor have, he will receive 3 shares with a proportional value.

So 3 shares will have the same value than 7 shares of $7 (this is $49). Finally, each share willhave a price of 49/3 = $16.33

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At this stage it is critical to reject poor new product ideas, and continue with viable new product ideas.

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