1. A reverse stock split:
A. is more popular in bull markets than in bear markets.
B. eliminates any previous stock dividend.
C. occurs when a company wants to increase the price of its common stock because the market hasn't recognized the improvements the company has made in achieving profitability.
D. means the company exchanges fewer new shares in place of more older shares.
2. Nova Components is a manufacturer of computer parts. The company has a book value of $2,417,762. In addition, the company has 402,500 common shares issued and outstanding. Nova Components is part of the computing industry which has an industry PB ratio of 6.10.
Using industry information, estimate the intrinsic value of Nova Components’ equity per share?
A) $11.11
B) $36.64
C) $67.74
D) $30.53