Splits, Stock Dividends & Ex-Dates — Q&A

SS factor = first number ÷ second number; New shares = old shares × SS factor; New price = old price ÷ SS factor. Forward split (factor > 1) when price is too high; reverse split (factor < 1) when price is too low. Total position value stays the same.

SS factor = 4. 400 shares @ $125 (100 × 4; $500 ÷ 4). Total value remains $50,000.

SS factor = 1.5. 450 shares @ $60 (300 × 1.5; $90 ÷ 1.5). Total value = $27,000 unchanged.

SS factor = 0.2. 20 shares @ $50 (100 × 0.2; $10 ÷ 0.2). Total value = $1,000 unchanged.

SD factor = decimal SD + 1; New shares = old × SD factor; New price = old ÷ SD factor. SD factor = 1.25 → 125 shares @ $16 ($2,000 total unchanged).

Stock split (forward or reverse) requires stockholder approval (affects par value). Stock dividend requires only BOD approval, not stockholder approval.

Buy before the ex-dividend date. On or after the ex-date, the seller receives the dividend. Under T+1, ex-date is effectively the same as the record date.

Price typically drops by approximately the dividend amount. Buy limit and sell stop orders are reduced by the dividend amount.

No. All stockholders are affected equally; if you owned 25% before, you still own 25% after. Splits change share count and price per share, not total value or ownership percentage.