The true value of stock does not change because of the stock split. It means one will get 2 additional stock for each one. There is a Journal Entry passed for Stock Dividend i.e debiting the Reserves (Retained Earnings) and crediting the Issued Share Capital, whereas no Journal Entry is passed in case of Stock Split only the details are mentioned in issued share capital. With a stock-split, the number of shares are increased through the proportional reduction in the par value of the stock. Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. Over time, these reinvested dividends will result in compounding interest, making your investment grow even faster. The stock's value doesn't change at all, but the lower stock price can affect how the stock looks and therefore gain new investors. This decrease in value makes share prices more affordable for investors, which is often the goal of the split.

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