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What is the major reason for a forward stock split?


What is the major reason for a forward stock split?

Step 1

Stock Split:


Stock Split is a scheme in which a company’s total number of shares outstanding will either increase or decrease without altering the firm’s.


Forward Stock Split:


Under this type of stock split, a company’s total number of shares outstanding will increase while the firm’s market value will remain the same.

Step 2

A major reason for the forward stock split is to increase the price of shares due to increase in demand. Under the forward stock split decision by the firm, the number of outstanding shares increases, but the market value of firm remains unchanged which res...

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