Stock-Split Watch: Is Microsoft Next?

Amid the stock split talk, investors need to keep Microsoft (NASDAQ: MSFT) in mind. The current price of around $460 per share is well below the nominal prices at which stocks like Broadcom or Nvidia recently announced splits.

Admittedly, it might be presumptuous to say that Microsoft is the next stock split. Many stocks are soaring to very high triple-digit prices amid an improving economy and game-changing market shifts in the tech sector. However, Microsoft differs from these names in one key area, which could prompt a split sooner rather than later.

Put simply, Microsoft may split soon because it is one of the 30 stocks that make up the Dow Jones Industrial Average. Unlike the other major indexes, the Dow is a price-weighted index. This means stocks with high nominal prices have disproportionate sway over the index score.

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Source Fool.com