Stock Split

A stock split happens when a company decides to increase the liquidity of its shares by dividing the existing shares into multiple new shares. Hence, a stock split occurs when the company decreases the price of the share by splitting each share into two or more shares. As this takes place, the shareholder's overall stock value remains the same and the market capitalization of the company will not change. In a stock split, the share price becomes lower, thus inviting more small investors who typically cannot buy shares at a price higher than $500 to acquire shares at a considerably affordable price. A business can take one share and split it two or three ways. If they decide to split it into two, both shares' total value will now be equal to the price of the original individual share.

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