Stock Splits

In a stock split, the company issues additional shares of stock in a fixed ratio, such as 2-for-1.

If you own stock that splits, your per-share basis declines because your total basis is now spread over more shares.

For example, if you own stock with a per-share basis of $100 and the stock splits 2-for-1, you would divide $100 by 2 to arrive at a new basis of $50 per share.