4 to 1 stock split example
Overview. For example, a company which has 100 issued shares priced at $50 per share, has a market capitalization of $5000 = 100 × $50. If the company splits its stock 2-for-1, there are now 200 shares of stock and each shareholder holds twice as many shares. Reverse stock splits operate in the other direction, in that a four-to-five reverse stock split means the company will convert four shares of outstanding stock to five shares. Share Calculation Assume a stockholder owns 100 shares of stock with a $50 per share value, and the company announces a five-to-four literal stock split. Defining Stock Splits. Companies announce stock splits as a ratio of two numbers. Thus, in a 2 for 1 stock split, sometimes written as a 2:1 split, shareholders get two new shares for every share