Investments & Financial Planning
What Is A Stock Split ?
A Stock Split is a division of outstanding shares of a corporation into a stated number of shares by which each outstanding share entitles its owner to a fixed number of new shares. In a reverse split, a stock owner receives less shares at a correspondingly higher price. In a forward split, a stock owner receives more shares at a correspondingly lower price. In both reverse and forward splits, the total equity number of shares multiplied by the stock price remains the same. An example of a two-for-one forward split, the owner of 200 shares, each worth $200, would be given 400 shares, each worth $100.
Note If you need professional help with "Investments & Financial Planning" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.