What is Stock Split

Stock Split – Stock split increases the total number of shares of a company. Due to stock split total number of shares increase, par value of shares is reduced but market capitalization will remain same and EPS of the company also reduced as the no of share outstanding increase.

For example consider a company which has 1,00,000 shares outstanding with a par value of BDT 10, now it decides to make a stock split of 2 for 1. So the new number of shares outstanding will be 2,00,000 and par value will be reduced to BDT 5.