What is Stock Split?

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It is the division of the face value of a stock into smaller units. In India, say a stock of face value Rs 10 could be split into two stocks of Rs 5 face value each, or five stocks of Rs 2 each or 10 stocks of Re 1 each. Often, companies resort to stock split to attract a larger number if investors as when a high value stocks is split, the affordability factor increases and it attracts more investors. This in turn increases the liquidity in the stock.

 

 

 

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