Stock Split

A stock split is eagerly awaited, especially by the owners or shareholders. Most people describe this term as a profit earned in the capital market. Indeed, nowadays, more people are involving themselves in the world of capital markets. Not a few people make investments in the capital market. Until the purchase of shares became more and more rampant in the community. The stock itself is now a familiar term in the community.

Some people rate stocks as the best investment that brings profit. Even investors invest in stocks to obtain huge profits that can be obtained in an instant. The hope is that there are benefits that can be obtained through the stock split. The existence of this advantage of share ownership is an attraction for many people. Therefore, there are more and more stock enthusiasts because they are tempted by the benefits that can be obtained.

For those of you who are interested in getting a stock split, you can see the following explanation. The below paragraphs will explain more about stock split including the types and the procedures. So that later there will be a lot of information that you can get about shares and their distribution. Start with the below information.

Types of Stock Split and Their Calculations

There are various kinds of stock splits. It is important to have some overview about this type for deeper knowledge regarding this item. Some of these types are common and widely known, which consist of the following.

1. Dividends

Dividends are profits earned by investors and come from the results of the company’s performance. This dividend will be a benefit for the owners or shareholders of the relevant company. Of course, the distribution of dividend profits must be carried out with the approval of the shareholders. The approval of these shareholders is generally stated in the GMS or General Meeting of Shareholders. To be able to distribute dividends, each company should pay close attention to the DPR.

What the DPR means is the Dividend Payout Ratio. DPR can also be interpreted as a percentage of profits that will later be distributed to each shareholder or shareholder. In distributing dividends, the calculation must be correct. For this reason, the calculation of stock profits in dividends is calculated using the formula. Dividends per share can be calculated using the dividend value formula divided by the number of shares outstanding. Of course, the calculation of this dividend must be done appropriately.

What is Stock Split

2. Capital Gains

The distribution of stock split profits can also be given through the capital gains system. What is meant by capital gains here is the profit obtained by shareholders from the sale of shares. So this profit affects the buying and selling process carried out by shareholders. If the difference between the selling and buying price is getting bigger, it means the profit will also be bigger. For example, buying shares at the lowest price and then selling them when the stock price is rising high.

Of course, this process of selling shares led to considerable profits. In other words, this capital gain due to stock trading activities. This trade is carried out in the secondary market so that stock investors can make a profit. The calculation of capital gains, of course, also uses a formula. Capital gains are obtained by the selling price formula minus the purchase price which has been multiplied by the number of shares.

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Stock Split Procedure

Each share distribution event is carried out with procedures, especially in the process of distributing dividends. Usually, this distribution is carry according to the size of the portion of shares owned. Of course, the more shares owned, the greater the stock profit.

Regarding the profit of shares provided by the company is usually carried out at the end of the accounting period. Because this is preceded by a financial performance report. This report is obtained quarterly and annually. Similarly, the profit obtained from capital gains. The process also occurs through procedures. Since this profit generation occurs after the process of selling shares by investors.

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Ideal Share Sharing

The stock split is the most anticipated thing. Therefore, this is usually done periodically and at the right time. This division is carried out at the end of each financial statement period. So this is done once a year. But apparently, some companies decide to share the profits of this stock twice a year.

If this is indeed the policy of a company, then this can be the right decision. What is certain is that the profit sharing of these shares will always be informed. To be precise, by issuers who usually do provide information to stock investors.

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This information is related to the time or when the stock split is carried out. Of course, there is an exact date for the stock split profits. If the info regarding this time has been notified to investors, the process will run smoothly. The right time tends to support the share of stock profits. It is in addition to being profitable and helping investors not to be left behind following the share distribution process.