A stock split occurs when a company divides its existing shares into multiple shares to enhance liquidity, while maintaining the total value of the shares. Common split ratios include 2-for-1 and 3-for-1, resulting in an increased number of shares for shareholders without altering market capitalization. The price per share decreases post-split, but the overall value remains unchanged.

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WHAT IS STOCK
SPLIT ?

2. STOCK SPLIT
• A stock split is when a company divides its existing shares into multiple
shares to increase the liquidity of the shares.
• Although the number of shares outstanding increases by a specific
multiple, the total value of the shares remains the same compared to
pre-split amounts, because the split does not change real value.
• The most common split ratios are 2-for-1 or 3-for-1, which means that
the stockholder will have two or three shares, respectively, for every
share held earlier.
• The price per share after the stock split reduces without affecting the
market capitalization.

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