What is Stock Split?
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Stock split Occurs when a firm issues new shares of stock
but in turn lowers the current market price of its
stock to a level that is proportionate to pre-split prices.
For example, if IBM trades at $100 before a 2-for-1
split, after the split it will trade at $50 and holders of
the stock will have twice as many shares than they had
before the split.
Split
Sometimes, companies split their outstanding shares into a
larger number of shares. If a company with 1
million shares did a two-for-one split, the company would
have 2 million shares. An investor with 100 shares
before the split would hold 200 shares after the split. The
investor's percentage of equity in the company
remains the same, and the price of the stock he owns is one-
half the price of the stock on the day prior to the
split
| Is This Answer Correct ? | 7 Yes | 1 No |
Answer / sricharan babu m
It means split in share face value. Here there is no change
in the share capital amount, it will change only number of
shares more or less.
Share capital A/C --- Dr 10,000 (500 shares of Rs
20Each)
To Share Capital A/C 10,000 (1000 shares
of Rs 10 Each)
Here 500 shares of Rs 20 each is divided into 1000 shares
of Rs 10 each. only number of shares and value of a share
changes but total value not change.
| Is This Answer Correct ? | 3 Yes | 0 No |
Answer / raghavendra
stock split means increasing the outstanding number of
shares and reducing the par valu
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / ps21
All publicly-traded companies have a set number of shares
that are outstanding on the stock market. A stock split is
a decision by the company's board of directors to increase
the number of shares that are outstanding by issuing more
shares to current shareholders. For example, in a 2-for-1
stock split, every shareholder with one stock is given an
additional share. So, if a company had 10 million shares
outstanding before the split, it will have 20 million
shares outstanding after a 2-for-1 split.
| Is This Answer Correct ? | 0 Yes | 1 No |
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