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You now have 70 shares. Price is expected to decrease to 1/7 of previous level.
by calcsam 13y ago
You now have 70 shares.
Price is expected to decrease to 1/7 of previous level.
- grecy 13y agoWill the dividend paid per share also decrease by 1/7?
- pbreit 13y agoYes, but math/wording not quite right. It will decrease by 6/7 (or be 1/7 of what it was).
- mikeyouse 13y agoYep. For the sake of the math, I'll use a 5:1 split. Day 0: Company trading for $1/share with 100 outstanding shares -- Market cap = $100. They are offering $0.05/share dividends -- Total dividend = $5 Day 1: Stock split at 5:1 Day 2: Company trading for $0.20/share with 500 outstanding shares -- Market cap = $100. They are offering $0.01/share dividends -- Total dividend = $5
- opendais 13y agoYes. Dividends are % based.
- czr80 13y agoYes. Basically, a stock split changes nothing about the value of the stock. However, it might lead to a slight rise in the stock price since small investors will now find it easier to buy, and so total demand for the stock might be a bit higher.
- chrsstrm 13y agoThis article has a little more information, stating that this quarter's dividend will be exactly $3.29 per share of common stock for all shareholders as of 5/12/2014. http://www.streetinsider.com/Dividend+Hike/Apple,+Inc.+(AAPL)+Tops+Q2+EPS+by+$1.44%3B+Announces+7-for-1+Stock+Split/9404636.html http://www.streetinsider.com/Dividend+Hike/Apple,+Inc.+(AAPL...
- pbreit 13y agoCorrect. In theory it doesn't make much of a difference (ie, 20 nickels vs 4 quarters). Investors generally perceive it to be management having a bullish outlook on stock price. And there is a small liquidity benefit (although AAPL already pretty liquid).
- MichaelApproved 13y ago> In theory it doesn't make much of a difference Options markets are where this has the most impact. In order to sell a covered call, I need to own at least 100 shares of a stock. A stock priced at $500 or higher (in the case of GOOG) makes it harder for a smaller investor to participate in the options market. Splitting the stock price makes it possible for a little guy to purchase options based on their stock holdings.
- wiredfool 13y agoApple started trading mini options a little while back, they're on blocks of 10 shares.
- minimax 13y agoHave you traded the minis? I just looked after reading MichaelApproved's comment and the quotes I saw for the minis were way outside the standard contracts.
- encoderer 13y agoWell they're not usually "way outside" but yes, they are usually more expensive. Also, most brokers add a per-contract fee so that also adds to your cost basis. If you're looking right now, it's possibly because AH trading is much more volatile.
- theandrewbailey 13y agoThe narcissist in me thinks it will go down further than 1/7th the previous price, because whenever I hear about Apple stock, it's going down. Apple sold 5 million iPhones, stock goes down; Apple announces new product, stock goes down; etc...
- cynwoody 13y agoWouldn't that be the pessimist in you? The narcissist in you would be bullish on you and neutral on Apple.