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a) A corporation which manufactures rubber gloves has been experiencing an unstable growth in the price of its common stock due to plummeting growth in
a) A corporation which manufactures rubber gloves has been experiencing an unstable growth in the price of its common stock due to plummeting growth in the agricultural sector worldwide. XYZ is going to employ a 1 -for-4 reverse stock split to increase the stock value. The information before the reverse stock split includes the following: Required: i. Calculate the earnings per share (EPS) before and after the reverse stock split. (9 marks) ii. Assume you owned 100 shares before the reverse stock split. Calculate the total value of your investment in XYZ stock before and after the split. Comment on your answer. (10 marks) b) Justify the appropriate time for a firm to use stock splits and stock dividends. (6 marks)
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