### How to Calculate Stock Split

A stock split or stock divide increases the number of shares but reducing the total value of each share. To calculate stock splits, you will need to determine the rations like 2-1, 2-3, 2-4, etc.

Learn how to calculate a stock split with the following examples:

(1) If you owned 60 shares worth \$10 per share prior to the split, and later the company decided to execute a 2-for-1 stock split, then:
After the split, the number of shares = 60 * 2 = 120 shares
The new price per share = \$10 / 2 = \$5

Note: Your stocks overall value remains the same (see below):
Before the split =: 60 * \$10 = \$600
After the split = 120 * \$5 = \$600

(2) ABC Company announces a 3-for-1 stock split, which means that you will own three shares for every 1 share previously owned. If you owned 10,000 shares at \$15 each pre-split, you would now own 30,000 shares at \$5 post-split (see below):
Before = 10,000 * \$15 = \$150,000 (market value)
After = 30,000 * \$5 = \$150,000

* Next: Advantages of Stock Splits