Script Splits and Issues

Sometimes firms offer shareholders three shares in proportion to the shares they own. For example, they may be offered one free share for every share owned. This is the script issue.

Alternatively, the shares are split. For example, every share, par or nominal value one dollar, is replaced by two shares, par or nominal value $.50.

In each case, the market value of the share will fall to half of the previous figure. The idea is that markets recognize a broad range of trading prices for shares. With growing profits and dividends over the years, the share price increases. Sometimes … Read more at Free Business Cards