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A customer owns 100 shares of ABC with a current market value of $5.00 per share. The company undergoes a 1-for-2 reverse split of the stock. Which of the following statements is true of the customer's holdings and the price of the stock?
Correct Answer: A
Step by Step Explanation: * Reverse Split Calculation: A 1-for-2 reverse split reduces the number of shares by half while doubling the price per share. * Pre-Split Holdings: 100 shares at $5.00 = $500. * Post-Split Holdings: 50 shares at $10.00 = $500. * Incorrect Options: The total value remains unchanged; only the number of shares and price per share adjust. References: * FINRA Corporate Actions Guidance: FINRA Reverse Splits.