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Stock split

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From an accounting standpoint, stock splits neither add nor detract from the intrinsic value of the stock. For example, if stock was $100,paying a $2.50 dividend and underwent a 2:1 split, the $100 stock becomes two $50 stocks each paying a dividend of $1.25. However, the market often bids up the stock price upon stock splits. Please offer an explanation for this.

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Stock splits are overviewed.

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Stock split halves the market price of the stock but doubles the number of shares outstanding. The value of shares available with the shareholders ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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