(i) A stock split is a good buying indicator, signalling that the prices of shares of the company are increasing. (ii) A stock split helps the small investors to acquire shares, particularly when the prices of shares are very high. (iii) If bonus shares are issued by a company, Reverse stock splits are rare in today’s stock market in part because of their controversial nature. A reverse stock split reduces a company’s outstanding shares. It’s the opposite of a regular, or forward, stock split in which a company increases its shares. Stock splits lower share costs and can promote rapid trading, which increasing stock volatility. Splits also complicate record-keeping and generate costs, since every shareholder must be notified of the split in advance.