A stock split involves the conversion of existing shares into a larger number of new shares with a lower nominal value. In a stock split, there is a procedure in which a corporation reduces the nominal value of the shares or the number of shares outstanding increased to reduce the price of a listed stock and make the shares easier to trade.
The implementation of a stock split must be approved at the Annual General Meeting. This measure is actually purely procedural in nature, since nothing changes in the ownership structure.
While a stock split is relatively simple all effects must actually be exchanged for a share split at par value. In the technical implementation, existing shares will be withdrawn and replaced by shares with a lower nominal value. This is one of the reasons why stock splits were previously rarely carried out. By now, most shares are, however, collected in the form of global equities so that only a few physically present Global Shares must be replaced as part of Trade Application Tracking.
Normally, a stock split would result in a sharp drop in the dividend payout. With a 1:2 stock split issued, both the face value and the market value would be halved spontaneously.