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30 July, 20:51

The Meat Market has 16,000 shares of stock outstanding at a price per share of $7. What will be the price per share if the firm declares a 3-for-7 reverse stock split?

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  1. 30 July, 22:41
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    The price will be $16.33.

    Explanation:

    In finance, a reverse stock split is a method where shares are merged to form a smaller number of proportionally more valuable shares. A reverse stock split is also called a stock merge.

    If the reverse stock is 3-for-7, that means for every 7 shares an investor have, he will receive 3 shares with a proportional value.

    So 3 shares will have the same value than 7 shares of $7 (this is $49). Finally, each share willhave a price of 49/3 = $16.33
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Home » Business » The Meat Market has 16,000 shares of stock outstanding at a price per share of $7. What will be the price per share if the firm declares a 3-for-7 reverse stock split?
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