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mer2018_MGMT4303Z01-1830-31392 Peter owns 170 shares of Texaco stock. Texaco just issued a reverse stock splt How many shares of stock does Peter now own? Select one O O a, 85 shares b. 45 shares 340 shares d. 170 shares O us page Next page pe here to search 1255 PM HomeEnd Alt Fn
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Answer #1

Reverse stock split is a process by which stock are merged to form a smaller number of proportionally more valuable stock. It boosts a company’s share price.

Since, Peter owns 170 shares of Texaco Stock, after issuing a reverse stock split by Texaco the number of shares with Peter must decrease and that too in proportion.

Therefore, option c and d are rejected.

We are left with option a and b, since 85 is 170/2 which is proportionate (this being one of the criteria).

Hence, Answer is a. 85 shares.

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