Calculate the impact of stock splits, reverse splits, and bonus issues on your shares and cost basis. Professional analysis for stock market corporate actions.
Example: 2:1 Split means you get 2 new shares for every 1 old.
A stock split does not increase your wealth. It's like cutting a pizza into more slices—the pizza is still the same size. The market often reacts positively due to perceived "affordability" for retail investors.
Your new break-even price per share.
Remains unchanged after corporate action.
Professional Insight: Stock splits are often seen as a sign of management's confidence in the company's future price growth. Reverse splits, however, are usually a warning sign of a struggling stock trying to maintain listing requirements.
In a Forward Split (e.g., 2:1), the company increases the number of shares and decreases the price per share. This is done to make the stock more accessible to retail investors.
In a Reverse Split (e.g., 1:10), the company decreases the number of shares and increases the price per share. This is often used by penny stocks to stay above the $1.00 minimum listing requirement of exchanges like the NASDAQ.
A Bonus Issue is similar to a split. If a company announces a "1:5 bonus," it means you get 1 extra share for every 5 you own. In our calculator, this would be entered as a 6:5 ratio (you now have 6 shares for every 5 old ones).
Most brokers will sell fractional shares resulting from a split and give you the cash (called "Cash in Lieu"). Your total investment value might change by a few cents due to this rounding.
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