How Do Stock Splits Affect Dividends?

When a company splits its stock, the number of outstanding shares owned by investors increases. For example, if you own 50 shares in a company that completes a 2-for-1 split, you'll be issued 50 additional shares. This affects the share price, as well as the dividend paid by each share of stock.

There are several possible company-specific reasons a stock split could be a good idea, but a primary motivation in most cases is a desire to maintain a stock price in a certain range. This can help keep the stock affordable to investors.

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Source: Fool.com