Wise Certification Practice Test 2026 - Free Certification Questions and Study Guide

In a 2-for-1 stock split, a company doubles the number of its outstanding shares while simultaneously halving the price per share. This means that for every share an investor holds, they will now have two shares, but the total value of their investment remains the same.

Starting with an original price of $80 per share, when a 2-for-1 stock split occurs, the price is divided by two. Thus, the new price after the split would be calculated as follows:

$80 (original price) ÷ 2 (because of the split) = $40.

Therefore, after the split, the price per share adjusts to $40, reflecting the new number of shares outstanding. This maintains the overall market capitalization of the company, ensuring that shareholders have the same proportional ownership in the company as before the split.