Stock split

PrepNuggets

Stock splits divide each existing share into multiple shares, creating more shares. Splits are expressed as a ratio. In a 2-for-1 stock split, each old share is split into 2 new shares.   So in this case, the total number of outstanding shares is doubled to 20.  

Stock splits have no effect on shareholders’ wealth.

Compare: Reverse stock split

See also: Stock dividend

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