You’d first need to determine the share split ratio, i.e. 2:1 or 5:3. Then use the ratio to gauge the number of new shares need to be issued. For example, if the split ratio is 2:1 and there are 100 million shares, then the new shares created will be additional 100 million since every one share become two shares. Therefore, total number of shares can be simply derived as 100 million x 2 = 200 million shares
Assuming the same number of outstanding shares 100 million and for the second example, when the split ratio is 5:3, it means for every 3 shares that you own, it’d be split into 5. This is slightly more complicated than the first one.
- Take 100 million shares and divide by 3 = 33 million shares
- Then take the answer (33 million shares) and multiply by 5 = 166 million shares
Usually, you no need to do calculation manually yourself. The circular would always do it for you.