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

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