QUESTION/ANSWER

Question/Answer

Question/Answer

Question

What is a stock split? How is a stock split different from a stock dividend?

Answer

A corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.

If you own a stock, you own a part of a company. If the company makes money, it has two choices: it can invest the money in expanding the company or it ...