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A company's price Tuesday at closing was 27.89. After closing it had a 3:4 reverse split. What was the company's...

A company's price Tuesday at closing was 27.89. After closing it had a 3:4 reverse split. What was the company's return for Wednesday, if you know that the closing price of the company on Wednesday is $24.95? There was no dividend payment in this period. (Provide your answer in percent, rounded to 2 decimals, omitting the % sign.)

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Answer #1

There is reverse split of 3:4, it means for 4 shares, 3 were issued.

Tuesday price = $27.89

Price after reverse split = price/Split ratio

27.89/(3/4)

27.89*4/3

=$37.186667

So, price per share After split on Tuesday closing or Wednesday opening = $37.186667

Closing price on Wednesday = $24.95

Rate of return = (Closing price - opening price)/opening price *100

(24.95 - 37.186667)/37.186667

-32.91%

So, rate of return of company is -32.91%

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