R Co. has outstanding 100 million shares, $1 par common stock, selling for $8 per share. After a 1 for 4 reverse stock split:

The options are as follows:

R would have 25 million shares, $4 par per share.

The market price per share would be about $2.

Fractional shares would be issued.

Retained earnings would be reduced

The correct is R would have 25 million shares, $4 par per share

Explanation:

The normal split involves increasing the number of shares and reducing the price per share while the reverse stock-split entails reducing the number of shares and increasing price as further demonstrated below:

100 million*1/4=25 million shares

par price=$1*4/1=$4

the first one $24,630