What Is a Stock Split?
A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.
Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.
The most common split ratios are 2-for-1 or 3-for-1, which means that the stockholder will have two or three shares, respectively, for every share held earlier.
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