Worst Buy Company has had a lot of complaints from customers of late and its...
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Finance
Worst Buy Company has had a lot of complaints from customers of late and its stock price is now only $4 per share. It plans to employ a one-for-five reverse stock split to increase the share value. Assume Dean Smith owns 108 shares.
a. How many shares will he own after the reverse stock split?
Number of shares shares
b. What is the anticipated share price after the reverse stock split? Anticipated stock price $
c. Because investors often have a negative reaction to reverse stock splits, assume the shares only go up to 90 percent of the value computed in part b. What will the share price be?
Share price $
d. How has the value of Dean Smiths holdings changed from before the reverse stock split to after the reverse stock split (based on the share value computed in part c)? (Input the answer as positive value.)
Dean Smiths holdings have (Click to select) increased by decreased by $
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