So you’ve brushed up on what corporate actions are, and what they mean for the companies in which you invest. Now, test your knowledge of corporate auctions with Stash’s quiz:
Do You Know the Ins and Outs of Corporate Actions?
Which bankruptcy filing results in the complete liquidation of a business?
Chapter 7 bankruptcy results in the complete liquidation of a business. That means the business stops all operations, and its assets, or what it owns, are sold off.
Do You Know the Ins and Outs of Corporate Actions?
Generally, a company is delisted from a stock exchange when shares of the company fall below ____.
Different exchanges have different rules, but generally speaking, when a company’s share price falls below a threshold of $1 for an extended period of time, the stock may get delisted.
Do You Know the Ins and Outs of Corporate Actions?
What might a company do in order to increase its share value and avoid getting delisted?
A reverse stock split is when a company reduces the number of shares it has for sale, which can drive up the price of those shares. It’s the opposite of a stock split, when a company increases the number of shares it has for sale.
Do You Know the Ins and Outs of Corporate Actions?
When a stock gets delisted, it might be traded over-the-counter. OTC stocks are also known as _________.
An over-the-counter (OTC) stock is only traded by wholesale dealers and market makers who specialize in trading that stock. It’s sometimes called a penny stock, because it can trade for less than a dollar per share.
Do You Know the Ins and Outs of Corporate Actions?
The merger between Sprint and T-Mobile was an example of a _____ deal.
The T-Mobile and Sprint merger in early 2020 converted all Sprint (S) shares to shares of T-Mobile (TMUS).
Do You Know the Ins and Outs of Corporate Actions?
Why might a company conduct a rights offering?
A rights offering occurs when a public company issues a contract to existing shareholders, giving them the right, but not the obligation, to purchase additional shares of the company at a predetermined price.