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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › stock splitts
sir in terms of stock splits
No cash is raised and therefore this is not a source of finance. It will have the effect of
reducing the market value per share of all the shares in issue, and can thus make the shares
more marketable.
so does that mean
stock splitts are making the shares of a company have more demand ?
It does not mean that there will be more demand for the shares, but because the market value per share is reduced it does make the shares more marketable, which (just as with a bonus issue) will make it easier to raise more equity finance in the future.