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The Old Thrift Plan
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<blockquote data-quote="JustTired" data-source="post: 353393" data-attributes="member: 10234"><p>While you don't make any money at the time of the split, you do end up with twice the shares of stock if it splits 2-1. So you will make money if it rises at some point in the future.</p><p> </p><p>Say you have 100 shares at $80. That's $8000. It splits 2-1. So you end up with 200 shares at $40 = $8000. Now if shares go up $10, in the pre-split scenario you would have $9000(100x$90). After 2-1 split, you would have $10,000(200x$50). Plus, when a dividend is paid, you would be receiving a dividend on 200 shares instead of 100.</p></blockquote><p></p>
[QUOTE="JustTired, post: 353393, member: 10234"] While you don't make any money at the time of the split, you do end up with twice the shares of stock if it splits 2-1. So you will make money if it rises at some point in the future. Say you have 100 shares at $80. That's $8000. It splits 2-1. So you end up with 200 shares at $40 = $8000. Now if shares go up $10, in the pre-split scenario you would have $9000(100x$90). After 2-1 split, you would have $10,000(200x$50). Plus, when a dividend is paid, you would be receiving a dividend on 200 shares instead of 100. [/QUOTE]
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