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stock split

stock split. Stock split is the process of splitting shares with high face value into shares of a lower face value. Face value - The face value is the fixed price of a share which is set by promoters and bankers while forming the company. 

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stock split

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  1. stock split • Stock split is the process of splitting shares with high face value into shares of a lower face value. • Face value - The face value is the fixed price of a share which is set by promoters and bankers while forming the company.  • A stock split increases the number of shares in a public company. The price is adjusted such that the market capitalization of the company almost remains same.

  2. Types of Stock splits

  3. FORWARD STOCK SPLITS • A stock market strategy. • Ratio can be 2-for-1, 3-for-1, 3-for-2 or 4-for-1. • Eg. 100 shares x $50 = $5,000 before the split. 200 shares x $25 = $5,000 after the split • The price of the stock however, the number of shares. • A company issues additional shares of stock • shareholders own more shares. • Liquidity of the stock

  4. REVERSE STOCK SPLITS • A negative investment strategy - a stock merge. • A tactic to reduce the number of shareholders. • Indication that a company is in financial trouble. • Eg. 100 shares x $50 = $5,000 before the split. 50 shares x $100 = $5,000 after the split • The price of the stock however, the number of shares • "D" to the end of its name- Name change and consolidation

  5. Companies with low share prices uses for: 1. Gain more respectability in the market. 2. Prevent from being delisted, or even removed from the market indexes.

  6. Stages • PRE-ANNOUNCEMENT • ANNOUNCEMENT • DORMANCY • PRE-SPLIT RUN • THE SPLIT

  7. Bonus issue: • Acompany gives free shares to its existing shareholders on a pro rata basis. • For instance, if a company declares a bonus of 2:1, the investor gets two additional shares for each share he holds. • Does not mean that the company has raised additional capital. • Stock split: • It is the division of a share into multiple shares. • Breaking the face value of share, the company tries to boost the liquidity of its shares. • investors have more shares after a stock split, their wealth remains unaffected.

  8. Britania industry Rs. 2118 424 424 424 424 424

  9. Other companies which had opted for stock splits are…

  10. Conclusion

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