Why Do Companies Split Their Stock? Stock Split Good?

Why do companies split their stock?

A company splits their stock because administration has a theoretical ideal price range for the firm’s stock. If the market price of the stock rises higher than the ideal price range, a stock split brings the market price back in line. Also, a decision to split a company’s stock makes the stock more attractive to the public for investing particular stock (small price). Over a period of time, “stock splits” may be good for investors.  And yet, there are no assurances. Many investors think that there will be immediate profits from a stock splits but usually this assumption is false.

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