1. What is a Share Split?

A share split (or stock split) is a corporate action that increases the number of shares outstanding by issuing more shares to current shareholders. The total dollar value of the shares remains the same because the split doesn't add real value.

2. How Does the Calculator Work?

The calculator uses the share split formula:

Where:

• \( \text{Old Shares} \) — Number of shares before the split
• \( \text{Split Ratio} \) — The ratio of new shares to old shares (e.g., 2:1 split would be 2)
• \( \text{New Shares} \) — Number of shares after the split

Explanation: The split ratio determines how many new shares you receive for each old share you own.

3. Importance of Share Split Calculation

Details: Understanding share splits helps investors track their holdings accurately after corporate actions and assess the impact on share price and market capitalization.

4. Using the Calculator

Tips: Enter the number of old shares you own and the split ratio (e.g., for a 3-for-1 split, enter 3). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why do companies split their shares?
A: Companies typically split shares to make them more affordable to small investors and increase liquidity.

Q2: Does a share split change the value of my investment?
A: No, the total value remains the same - you own more shares but each is worth proportionally less.

Q3: What is a reverse split?
A: A reverse split reduces the number of shares (e.g., 1-for-10) and increases the share price proportionally.

Q4: How does the split ratio work?
A: A 2:1 split means you get 2 new shares for every 1 old share. A 3:2 split means 3 new shares for every 2 old shares.

Q5: Do I need to do anything when a stock I own splits?
A: No, the split happens automatically. Your brokerage account will reflect the new number of shares.