Timothy owns 840 shares of Countess Corp., which is priced at $14.13 per share. The company...
Timothy owns 840 shares of Countess Corp., which is priced at $14.13 per share. The company plans a 3-for-5 reverse stock split. How many shares will Timothy own and what will the share price be after the reverse stock split?
504; $14.13
504; $8.48
504; $23.55
1,400; $8.48
1,400; $23.55
Homework Answers
Stock will be reverse Split i.e. every 5 shares will be converted to 3 shares.
Value of Shares Tomithy have = No of Shares * Value per Share
= 840 * 14.13
= $ 11,869.2
So Timothy will have 840 * 3 /5 = 504 Shares after reverse Split
Value after reverse split remians same So, Share Price will be
$ 11,869.2 = New No of shares * Share Price
$ 11,869.2 = 504 * Share Price
Share Price = 11869.2 / 504 = $ 23.55
Option C is correct.
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