Forward Stock Split Calculator

Forward Split Formula:

\[ \text{New Shares} = \text{Old Shares} \times \frac{\text{New}}{\text{Old}} \]

New Shares:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is a Forward Stock Split?

A forward stock split is a corporate action where a company divides its existing shares into multiple shares. Although the number of shares outstanding increases, the total dollar value of the shares remains the same compared to pre-split amounts.

2. How Does the Calculator Work?

The calculator uses the forward split formula:

\[ \text{New Shares} = \text{Old Shares} \times \frac{\text{New Ratio}}{\text{Old Ratio}} \]

Where:

Old Shares — Number of shares owned before the split
Old Ratio — The denominator of the split ratio (e.g., 2 in a 3:2 split)
New Ratio — The numerator of the split ratio (e.g., 3 in a 3:2 split)

Explanation: The formula calculates how many new shares you'll receive after a forward stock split while maintaining the same total value of your investment.

3. Importance of Stock Split Calculation

Details: Understanding stock splits is crucial for investors to accurately track their holdings, calculate cost basis per share, and understand how corporate actions affect their investment portfolio.

4. Using the Calculator

Tips: Enter the number of shares you currently own, the old ratio (denominator), and the new ratio (numerator) of the split. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why do companies perform forward stock splits?
A: Companies typically perform splits to make shares more affordable to small investors, increase liquidity, and potentially make the stock more attractive.

Q2: Does a stock split change the value of my investment?
A: No, a stock split does not change the total value of your investment. It simply increases the number of shares you own while reducing the price per share proportionally.

Q3: How does a forward split differ from a reverse split?
A: A forward split increases the number of shares and decreases the price per share, while a reverse split decreases the number of shares and increases the price per share.

Q4: Do I need to take any action when a stock I own splits?
A: No, the split happens automatically. Your broker will adjust your account to reflect the new number of shares at the new price.

Q5: How does a stock split affect my cost basis?
A: Your total cost basis remains the same, but your cost basis per share decreases proportionally to the split ratio.