-# of shares before split = 100 at $50/share
-Split = 2/1
-# of shares after split = 200 at $25/share
-In order to own the same portion of the company, the stock price goes down to $25/share
-100 shares at $50/share = 200 shares at $25/share
-The value is the same, only the share price changes
-Splits can come in different denominations (e.g. 2/1, 3/1, 5/1, 3/2, etc)
Why do Companies Do This?
-To allow new investors to come in at a lower stock price
-To re-balance their shares
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