Stock split
Principles of Finance glossary · Principles Of Finance
Definition
A corporate action that increases shares outstanding proportionally while keeping market cap unchanged.
Stock split in plain English
A stock split is when a company slices each existing share into more pieces without changing what the whole company is worth -- like a pizza place cutting every slice in half so you now hold 16 skinnier slices instead of 8, though it's still the same pizza. If you owned 10 shares at $200 each, after a 2-for-1 split you own 20 shares at $100 each, and your total $2,000 hasn't budged. Companies do this mostly to make the per-share price look more affordable and easier to trade, not because anyone suddenly got richer or poorer.
Related Principles of Finance terms
Principles of Finance practice questions · Principles of Finance flashcards · Principles of Finance study guide