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  • harold33272 harold33272 Jul 10, 2012 1:44 PM Flag

    Question on the dividend after the split

    Is it possible or likely that KO will increase the dividend after the split? In other words, if the stock is trading at $40 a share immediately following the split, is the current yield of 2.60% going to remain status quo?

    Thanks in advance.

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    • The dividend is a percentage based on the price of the stock. So, if it splits at $80 a share(round number to make it easy) it will earn the current 2.60% dividend on the split price of $40, but you will have two. The split will do nothing to affect the dividend. The affect it will have is purely psychological for the stock. People are more likely to buy a $40 stock than an $80 stock.