A stock split or stock divide increases the number of shares in a company. A stock split causes a decrease of market price of individual shares, not causing a change of total market capitalization of the company. Stock dilution does not occur.A company may split its stock, for example, when the market price per share is so high that it becomes unwieldy when traded. For example, when the share price is very high it may deter small investors from buying the shares.

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