Q:

What investor benefits result from stock splits in Toronto-Dominion Bank stock?

A:

Quick Answer

With its share price approaching $100, Toronto-Dominion Bank cited a desire to make ownership affordable to prospective retail investors when announcing its 2013 stock split, says Reuters. Because stocks are usually sold in 100-unit board lots, small investors often struggle to invest in companies with high shares prices, explains Investopedia.

Continue Reading

Full Answer

Toronto-Dominion's stock splits do not directly create economic value for existing shareholders, according to The Globe and Mail. Because the per-share ownership stake in the company is reduced proportionate to the number of additional shares, the total value of an investment in the bank remains unchanged following a stock split. However, because the company's shares become more accessible, a split can improve liquidity and make it easier for an investor to sell his shares.

Learn more about Investing

Related Questions

Explore