Question
In: Finance
Worst Buy Company has had a lot of complaints from customers of late, and its stock...
Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $5 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 144 shares.
a. How many shares will he own after the
reverse stock split? (Do not round intermediate
calculations and round your answer to the nearest whole
number.)
|
b. What is the anticipated price of the stock
after the reverse stock split? (Do not round intermediate
calculations and round your answer to 2 decimal
places.)
|
c. Because investors often have a negative reaction to a revere stock split, assume the stock only goes up to 70 percent of the value computed in part b. What will the stock’s price be? (Do not round intermediate calculations and round your answer to 2 decimal places.)
|
d. How has the total value of Dean Smith’s
holdings changed from before the reverse stock split to after the
reverse stock split (based on the stock value computed in part
c)? To get the total value before and after the split,
multiply the shares held times the stock price. (Input the
amount as a positive value. Do not round intermediate calculations
and round your answer to 2 decimal places.)
|
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 1 year agoRelated Solutions
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