How many shares will he own after reverse stock split

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Reference no: EM133578686

Question

Worst Buy Company has had a lot of complaints from customers of late, and its stock price is now only $4 per share. It is going to employ a one-for-six reverse stock split to increase the stock value. Assume Dean Smith owns 156 shares.

How many shares will he own after the reverse stock split?

Number of shares

What is the anticipated price of the stock after the reverse stock split?

Anticipated stock price

Because investors often have a negative reaction to a reverse 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?

Note: Do not round intermediate calculations and round your answer to 2 decimal places.

Stock price

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.

Reference no: EM133578686

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