Question: Reverse stock split. If a company declares a 2 2 - for - 5 5 reverse stock split, the price before the split is $

Reverse stock split. If a company declares a 22-for-55 reverse stock split, the price before the split is $2020, and the price after the split is $5050, show that a current shareholder is no better off after the split. Question content area bottom Part 1 Current shareholders are no better off after the 22-for-55 reverse split because if they owned one share at $2020 per share before the split, they would then own of a share worth $5050 per share immediately after the split.

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