Trading, Accounts & Prohibited ActsQuestion 232 of 398
After a forward stock split, what happens to an individual shareholder's proportional ownership of the company?
a.It increases because the shareholder owns more shares
b.It stays the same because every shareholder's share count changes proportionally
c.It decreases because more shares are outstanding
d.It becomes zero until the shares are re-registered
Explanation
A forward split increases every shareholder's share count in the same proportion, so each investor's percentage ownership of the company is unchanged. The split changes the number and price of shares, not the relative stake each holder controls.
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