What Is Stock Split? Meaning & Example
Definition
A stock split increases the number of shares while lowering the price per share proportionally. The total value of your holding stays the same.
Related terms
A stock represents partial ownership in a company. Owning shares gives you a claim on part of the company's assets and profits, and sometimes voting rights.
Market CapitalizationMarket capitalization is the total value of a company's shares, found by multiplying the share price by the number of shares outstanding. It is a quick way to gauge company size.
Share BuybackA share buyback is when a company repurchases its own shares from the market. It reduces the number of shares outstanding, which can raise earnings per share.
What is Stock Split?
A stock split increases the number of shares while lowering the price per share proportionally. The total value of your holding stays the same.
Can you give an example of Stock Split?
In a 2-for-1 split, 10 shares at $200 become 20 shares at $100, still worth $2,000.