Canadian Securities Course (CSC) Level 1 Practice Exam 2026 - Free CSC Level 1 Practice Questions and Study Guide

A reverse stock split works by decreasing the number of outstanding shares while increasing the stock price. This is achieved by combining a certain number of existing shares into a single share, effectively reducing the total number of shares available in the market. As a result, the price per share increases due to the reduced supply of shares. This strategy is often used by companies to boost their stock price, making it more attractive to investors and potentially meeting stock exchange requirements.