When a company exchanges 200 shares of stock worth $20 each for 100 shares worth $40 each, they are using?

1 answer:

6 0

When a company exchanges 200 shares of stock worth $20 each for 100 shares worth $40 each, they are using reverse stock split.
A reverse stock split is a corporate action in which a firm or a company reduces the number of shares it has outstanding by a set multiple. For example, if a company announces a reverse stock split of 1:50, this means that once the split occurs investors will receive one share for every 100 shares they own.

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