Stock Split Calculator 2024 - Every Investor Should Use!

This stock split calculator calculates the new number of shares and their price after a stock split. You provide the current number of shares, the share price, and the split ratio. The calculator then shows the updated share quantity and price.

How to Use this Stock Split Calculator

To use the split calculator:

Enter Current Shares: Input the total number of shares you own in the “Current Number of Shares” field.
Input Share Price: Enter the current price per share in the “Current Share Price ($)” field.
Enter Split Ratio: Fill in the “Split Ratio (X:Y)” field with the appropriate numbers, e.g., 2:1 for a 2-for-1 split.
Calculate: Click “Calculate” to see the new number of shares and the updated share price.

Why Companies Split Their Stocks

To make shares more affordable for retail investors.
To increase liquidity and trading volume.
To signal confidence in the company’s future growth.
To maintain an optimal share price range.

To stay updated on upcoming stock splits, you can check Yahoo Finance and TipRanks for the latest information.

Calculation for Stock Split

1. Determine the Split Ratio:

The split ratio can be expressed in the form “X” where X is the new number of shares and Y is the old number of shares. For example, a 2-for-1 split means each old share is divided into two new shares.

2. Calculate New Number of Shares:

Multiply the current number of shares you own by the split ratio.

Formula:

\text{New Number of Shares} = \text{Current Number of Shares} \times \frac{X}{Y}​

3. Adjust the Share Price:

Divide the current share price by the split ratio.

Formula:

\text{New Share Price} = \frac{\text{Current Share Price}}{X/Y}

Example Calculation

Suppose you own 100 shares of a company and the current share price is $200. The company announces a 2-for-1 stock split.

1. Split Ratio: 2:1 (each share splits into 2 new shares)

2. New Number of Shares:

\text{New Number of Shares} = 100 \times \frac{2}{1} = 200

3. New Share Price:

\text{New Share Price} = \frac{200}{2} = 100

After the stock split,

Output | you will own 200 shares, and each share will be worth $100

Stock Split vs Reverse Split vs Fractional Shares: Which Is Best?

Stock Dividend: Increase the number of shares while reducing the price per share; many shareholders, for this reason it’s likely to be seen a good thing.
Reverse Dividend: Companies often use this when they don’t want to be removed from stock exchanges or to improve the image of their stocks.
Fractional Shares: Allow investors to buy less than one whole share, even when stocks are expensive and no full stock split makes sense.

Which Is best? it depends on the context:

Stock Split is generally chosen when the stock price of a company is high, it is more attractive for retail investors.
But when the stock price is low, Reverse Split may seem necessary. It is also a sign of financial issue inside the company.
Fractional Shares provide individual investors increased flexibility when purchasing costly stocks that have yet to enact a stock split. For small initial investments just beginning, fractional shares eradicate barriers often posed by share prices of singular holdings in prominent corporations.

Does a Stock Split Affect Dividends?

A stock split does affect dividends, but it doesn’t change the total amount you receive. Here’s an example:

Suppose you hold 1 share of a company that has issued $2 per share as dividend. Now you have 2 shares after a stock split, but the dividend per share is adjusted to $1 Therefore, even if you have more shares in some company than the other one, your total dividend is still $2 (for example 2 x$1)

In short, the amount you get stays the same, but it’s spread across more shares after the split.

How Do Stock Splits Affect ETFs?

If a company undergoing a 2-1 stock split is held by an ETF, then the ETF needs to adjust the number of shares it holds in that company. However, the total value of the ETF’s investment in that company stays constant.

For example, If before a 2-for-1 stock split the ETF holds 10 shares of a company, then after the split, the ETF will have 20 shares-but at no extra cost. The total worth all added up together is still the same as before.

So while the number of shares inside the ETF increases, nobody notices. From the ETF’s price and performance standpoints, it might just as well have never happened!

So in conclusion, stock splits increase the number of shares you own when they divide each share into more than one unit. Amidst favorable conditions on the stock trade front or a strong demaAnd they can also help to increase trading volume, which as we have seen is a useful indicator for tomorrow.

While your dividends and the value of ETFs remains the same, stock splits opens up many new possibilities and may be an indicator of future growth.As long as you understand this, managing your investments will be easier.