NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions
A listed company announces a stock split reducing face value from Rs 10 to Rs 2 per share. Ms. Kapoor holds 300 shares before the record date. What will her holding be after the split is processed by the depository?
Ms. Kapoor will hold 1,500 shares. Splitting a Rs 10 share into Rs 2 shares gives five shares for each one held, so 300 multiplied by five equals 1,500, with the total value of her holding unchanged.
- A60 shares
- B300 shares
- C1,500 sharesCorrect
- D3,000 shares
Explanation
Each Rs 10 share becomes 10/2 = 5 shares of Rs 2. So 300 x 5 = 1,500 shares. 60 comes from dividing instead of multiplying. The split changes the number of shares and a new ISIN is typically allotted because face value changes.
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