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Answer Posted / bhupender janmejai
A stock split is where a publicly traded company increases the number of shares available to be purchased. A stock split does not alter the market capitalization of the company, so the stock price must be adjusted accordingly.
As a stock split lowers the stock price, it would ultimately make the stock more attractive to a wider group of investors. Prior to a split a stock may not have been affordable for many, whereas after, it may be.
A stock split is often seen a positive sign that a company is growing and is likely to continue to grow. As a result a company's stock price often increases after a split.
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