Question

Select all that apply

Which of the following are reasons for reverse stock splits?

Multiple select question.

To lower the par value per share


To eliminate small shareholders


To comply with listing requirements


To raise stock prices to respectable levels

Answer 1

The reasons for reverse stock splits include:

- **To comply with listing requirements:** Companies may conduct a reverse stock split to increase their share price to meet the minimum price requirements set by stock exchanges.

- **To raise stock prices to respectable levels:** A reverse stock split consolidates shares and can increase the share price, making it appear more favorable or appealing to investors.

The other options—lowering the par value per share and eliminating small shareholders—are not typical reasons for a reverse stock split.

Answer 2

To eliminate small shareholders is also correct