For instance, if a stock is trading at $100 per share and the company initiates a two-for-one stock split, a holder of 100 shares before the split will hold 200 shares at $50 per share after the split. If the stock split happens before the date of record then the dividend's total dollar value will stay the same, but the per-share price will be adjusted to reflect the increased number of shares after the stock split.Ī stock split is an action taken by a company to divide its existing shares into multiple shares.If the stock split happens after the date of record, then the dividend is paid out as normal and there is no impact on the payout.A dividend, or cash payment made periodically by a company, is impacted by a stock split depending on the dividend's date of record, or the date on which one must be a shareholder to receive a dividend.A stock split does not reduce the total dollar value of all outstanding shares, nor does it cause an investor to lose money it merely increases the number of shares outstanding, boosting liquidity.
A stock split happens when a company divvies up its current shares into multiple shares, which lowers the price of the individual stock while increasing the number of outstanding shares.
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