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Answer Posted / vinay kumar darsi
stock split means dividing one share into parts.this is done just to increase number of stock.at the same time price also divided but there is no change in mkt capitalization
For example, assume that XYZ Corp. has 20 million shares outstanding and the shares are trading at $100, which would give it a $2 billion market capitalization. The company’s board of directors decides to split the stock 2-for-1. Right after the split takes effect, the number of shares outstanding would double to 40 million, while the share price would be $50, leaving the market cap unchanged at $2 billion.
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