1. What is a Stock Split?

A stock split is a corporate action where a company divides its existing shares into multiple shares to boost liquidity. Although the number of shares increases, the total value remains the same because the split doesn't add real value.

2. How Does the Calculator Work?

The calculator uses the stock split formula:

Where:

• Old Shares — Number of shares owned before the split
• Ratio — Split ratio (e.g., 2:1 split = 2, 3:1 split = 3)
• New Shares — Number of shares owned after the split

Explanation: The formula multiplies your existing shares by the split ratio to determine how many shares you'll have after the split.

3. Importance of Stock Split Calculation

Details: Calculating post-split shares is essential for investors to understand their new position size, track portfolio value, and make informed investment decisions following corporate actions.

4. Using the Calculator

Tips: Enter the number of shares you currently own and the split ratio (e.g., for a 2:1 split, enter 2). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a reverse stock split?
A: A reverse stock split reduces the number of shares and increases the share price proportionally. For example, a 1:10 reverse split would convert 10 shares into 1 share.

Q2: Does a stock split affect the total value of my investment?
A: No, a stock split doesn't change the total value of your investment. It only increases the number of shares while decreasing the price per share proportionally.

Q3: How do I calculate the new share price after a split?
A: Divide the pre-split share price by the split ratio. For example, if a stock was £100 before a 2:1 split, the new price would be £50.

Q4: Are there tax implications for stock splits in the UK?
A: No, stock splits are not taxable events in the UK as they don't represent a disposal or acquisition of shares for capital gains tax purposes.

Q5: How often do companies announce stock splits?
A: Companies typically announce splits when their share price becomes too high, making shares less accessible to small investors. There's no fixed schedule for splits.