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What is a Stock Split?

As a stock's price rises, the company's "market capitalization" (its worth) increases.

For example, on September 15, 2011, Google (NASDAQ: GOOG) had 252,993,000 shares of stock worth $542.56 per share.  Multiplying these numbers gives a market capitalization of $137,263,882,080.  If you owned every share of Google, you'd have over $137 billion worth of stock!

The problem is, stocks that sell for $542 per share are tough for smaller investors to buy.  Some companies like to keep their stock price low so that more investors can afford it.

A Stock Split is how a company can do this.