Definition
An increase in the number of outstanding shares of a company's stock, such that proportionate equity of each shareholder remains the same. This requires approval from the board of directors and shareholders. A corporation whose stock is performing well may choose to split its shares, distributing additional shares to existing shareholders. The most common stock split is two-for-one, in which each share becomes two shares. The price per share immediately adjusts to reflect the stock split, since buyers and sellers of the stock all know about the stock split (in this example, the share price would be cut in half). Some companies decide to split their stock if the price of the stock rises significantly and is perceived to be too expensive for small investors to afford. also called split.
This content can be found on the following page:
http://www.investorwords.com/cgi-bin/getword.cgi?id=4751&term=stock%20split
email to a friend
print this definition
cite this definition
link to this page
Copy and paste this HTML in your website to link to this page
'stock split' appears in the definitions of these other terms on BusinessDictionary.com:
reverse share split, rollback, stock split down, reverse split, voting right
Related Research Articles from the InvestorGuide.com University
Stock Actions
What are the different types of stock actions? Read about dividends, splits, and buybacks. Learn the consequences and the reasoning behind these actions.
Types of Stock
With so many options, how do I decide which stocks are right for me? Topics include common and preferred stock, stock classes, market cap, penny stocks, sector stocks, cyclical stocks, defensive stocks, and tracking stocks.
Principles of Investing
Here are the seven fundamental principles of investing that every investor should know. Topics include knowing your current situation, goals and risk tolerance; getting your finances in order; thinking long term and focusing on stocks; researching and monitoring your investments; and knowing when and how to get financial help.
Related Resources from InvestorGuide.com
Stock of the Day Newsletter
Learn about stocks that are making headlines today by signing up for our free newsletter.
Stock Research Tool
Using our stock research tool, you have access to our stock tracker, quotes, interactive charts, news, analysis and profile information. Click here to use our stock research tool or enter a stock ticker here:
|
