Understanding Stock Splits

Every now and again, companies will execute what is call a stock split or even a reverse stock split. It seems to create chatter amongst investors when a stock split is announced by the board of directors but the reality is that a stock split doesn’t change anything to the underlying company value. The company is worth exactly the same.

For example, take Company X which operates in the drink business and have a stock price of $100 and they have 1 million outstanding shares for a total value of $100 million. In any of the scenarios below, the value will stay the same:

How To Transfer Shares To Your Kids ? The Passive Income Earner

How To Transfer Shares To Your Kids � The Passive Income Earner: For the longest time, I have been an income focused investor. I remember when I started working, I did not have much money to invest and I invested in mutual funds telling myself “if I can have more to invest one day, I would buy stocks” (at the time, trading was usually $30 – no $6.99 options back then). It turns out that you don’t need a lot of money and you don’t have to pay any fees!!! It was quite marvelous when I learned about buying shares with Computershare or Canadian Stock Transfer directly from the companies. It’s something I learned from The Lazy Investor by Derek Foster – strongly recommended if you are a beginner dividend investor.