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What is an issue forward split?

Issue forward split

An issue forward split increases the number of shares a company issues. But it does this without changing a company's value because the shares have a lower value.

Where have you heard about an issue forward split?

Companies announce when they are going to split shares. If are a shareholder, you may have seen an announcement from the company you have invested in.

What you need to know about issue forward splits.

An issue forward split is also known as a forward stock split. Different ratios are used in a split.

For example in a 3-1 split, a shareholder of 10,000 shares at $300 would hold 30,000 shares at $100 after the split. Total value of the holding remains unchanged.

Companies use forward splits to allow more investors to invest in stock at a lower price. The increased liquidity and greater investor pool can, but in no way guarantees, a share price rise.

An issue forward split is the opposite of a reverse stock split which is when shares are merged to reduce the number available without changing the total value.

Find out more about issue forward splits.

See our information on shares and issues.

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