How do stock dividends and stock splits affect the value of my investment?
A. In theory, stock splits and stock dividends do not affect the value of your investment. In both cases, the corporation issues more shares and the stock’s market price is automatically adjusted proportionately so that the value of your total investment stays the same. For instance, if you own 100 shares of a stock priced at $60 (a $6,000 value) that splits or declares a stock dividend, the math will change, but the value will not: Pre-split 100 at $60 = $6,000 value 2-for-1 split 200 at $30 = $6,000 value 100% stock dividend 200 at $30 = $6,000 value 3-for-2 split 150 at $40 = $6,000 value 50% stock dividend 150 at $40 = $6,000 value Like cash dividends, stock splits and stock dividends will have a declaration date, a record date, and a payment date. If the payment date has passed and you have not received your new shares, you may follow the same procedures outlined for cash dividend payment problems- Note: Par value is a nominal dollar value per share set by the corporation’s charte
