How does a two-for-one stock split actually work?
After a two-for-one stock split, shareholders receive an additional share for every share they currently own and will therefore have twice as many shares after the split as before the split. Accordingly, the price of each share will be roughly half the previous price, though the total value of the holdings immediately after the split will be the same as before the split. For example, a shareholder who owns 100 Common Shares of Aetna at a market price of $95 as of the Record Date has a total value of $9,500. After the split, this shareholder will own 200 shares valued at approximately $47.50 per share for a total investment value of $9,500. The shareholder’s investment value remains the same until the stock price moves up or down.
In a two-for-one stock split, shareholders receive an additional share for every share they own when the split occurs. The price of each share will be roughly half the previous price, but the total monetary value of your holdings remains unchanged until the stock price subsequently moves up or down.
