17.5 SHARE SPLIT AND REVERSE SPLIT
17.5.1 Share Split
Share split means the breaking of a share into two or more parts. If the value of a share is Rs 100 and it is split into two parts, there will be two shares of Rs 50 each in lieu of one share of Rs 100. The shareholders will possess twice the number of shares and earning and dividend per share will be halved after the split but their total wealth will remain unchanged.
Share split is done when the market price of share is very large and it is beyond the reach of general investors. In such conditions, the marketability of the share is reduced. Thus in order to improve the marketability of the shares, they are split so that the lower-income investors can purchase them.
Share split means the ...
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