About Stock Splits
A stock split is a corporate action where a company divides its existing shares into multiple shares. Although the number of shares outstanding increases, the total dollar value of the shares remains the same compared to pre-split amounts.
Companies often split their stock to make shares more affordable for individual investors. For example, in a 2-for-1 split, each shareholder receives an additional share for every share they own, but the price per share is halved. The total value of the investment remains unchanged.
Our Stock Split Calculator helps you understand exactly how a split will affect your holdings. Simply enter your current number of shares, the current price per share, and the split ratio to see your new position after the split.
Frequently Asked Questions
What is a stock split?
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A stock split is when a company increases the number of its outstanding shares by issuing more shares to current shareholders. For example, in a 2-for-1 split, each shareholder receives an additional share for each share held.
Does a stock split affect the value of my investment?
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No, a stock split does not change the total value of your investment. While the number of shares increases, the price per share decreases proportionally, leaving the total value unchanged.
Why do companies split their stock?
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Companies typically split their stock to make shares more affordable for individual investors. A lower price per share can make the stock seem more accessible and increase liquidity in the market.
What's the difference between a stock split and a reverse split?
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A stock split increases the number of shares and decreases the price per share. A reverse split does the opposite - it reduces the number of shares and increases the price per share. Companies often do reverse splits to meet exchange listing requirements.
How do I calculate a stock split?
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To calculate a stock split:
1. Multiply your current shares by the first number in the split ratio
2. Divide by the second number in the ratio
3. Divide the current share price by the same ratio
Our calculator does this automatically for you!