A firm can repurchase its shares in all of the following ways except through a reverse stock split.
What is a Reverse stock split?
- In the world of finance, a reverse stock split, often known as a reverse split, is the act of effectively combining shares of corporate stock into a smaller number of shares that are proportionally more valuable.
- Another name for a reverse stock split is a stock merger. The term "reverse stock split" refers to the more widespread stock split, in which shares are essentially divided to create a greater number of shares that are proportionately less valued.
- To decrease the number of stockholders, a reverse stock split may be employed.
- Any shareholder with fewer than 100 shares would simply receive a cash settlement if a corporation carried out a reverse split in which one new share was issued for every 100 old shares.
Hence, A firm cannot repurchase its shares through a reverse stock split.
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