What is a stock split?
In a stock split, a company divides existing shares into multiple shares. As the number of shares increases, the price of the share goes down, but the market capitalisation remains the same. This means the number of shares you hold goes up, while their price comes down. It is similar to splitting an `100 note to two `50 notes.
2. Why does a company opt for a stock split?
The prime intention of a company announcing a stock split is to increase the liquidity in its stock and reduce the price of the share. When a stock runs up sharply, the company would split its shares to lower the denomination. Retail investors perceive that shares with lower prices are less expensive.
3. How does it benefit investors?
For existing investors, the price one gets for each share declines but the total number of shares increases. A stock split may have a sentimental impact on the stock temporarily , but it need not help investors in the long run.
4. What should investors keep in mind?
Analysts advise investors not to blindly buy shares of a company just because the price is lower. This means that a stock need not be cheap just because it is `50 and not `500. Also, if a company keeps opting for the stock split route, it should probably be avoided.
Top 10 Tax Saving Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300
-----------------------------------------------
Posts
No comments:
Post a Comment