After a stock split, the number of shares each shareholder holds is:

After a stock split, the number of shares each shareholder holds is:

• A. The same
• B. Less
• C. Greater
• D. Unknown

Answer: (C)

When a stock splits, the company increases the number of shares outstanding by issuing more shares for each one currently held. This results in each shareholder having more shares than before, though the overall value of their holding remains roughly the same because the price per share is adjusted downward by the same factor. The ownership percentage of each investor stays essentially the same (aside from any minor rounding of fractional shares). So, the number of shares a shareholder holds after a split is greater.

When a stock splits, the company increases the number of shares outstanding by issuing more shares for each one currently held. This results in each shareholder having more shares than before, though the overall value of their holding remains roughly the same because the price per share is adjusted downward by the same factor. The ownership percentage of each investor stays essentially the same (aside from any minor rounding of fractional shares). So, the number of shares a shareholder holds after a split is greater.