After a two-for-one stock split, which of the following will most likely change relative to its pre-split value?
A two-for-one stock split will double the amount of shares, thus reducing the EPS to half of its pre-split value. P/E will remain unchanged because the price also reduces by half and exactly cancels out the effect of the reduced EPS. The dividend payout ratio remains unchanged because the same proportion of earnings will still be used after the split.