Question

Gene owns 1,200 shares of XYX Corporation. The company instated a 1 for 10 reverse stock split on November 7. The pre split market price per share was $1.20.

Answer 1

After the reverse stock split, Gene will own 120 shares of XYX Corporation.

To calculate the post-split market price per share, we can start by finding the total value of Gene's shares before the split:

Total value before split = 1,200 shares * $1.20 per share = $1,440

Since the reverse stock split is 1 for 10, the total number of shares outstanding will be reduced by a factor of 10, and the price per share will be increased by a factor of 10:

Total value after split = 120 shares * $12.00 per share = $1,440

Therefore, the post-split market price per share is $12.00.

Explanation: