| This lliesis examines the effect of split ratio to stock price and liquidity changes amongst companies which conduct stock splits in the Indonesia Stock Exchange for the observation year of 2010-2015 with a total sample of 23 companies. By using linear regression analysis method, results of the analisis show that split ratio has significant effect on stock price and liquidity changes amongst companies which conduct stock splits at 95% confidence level. The higher the split ratio will leads to more outstanding shares available in the market to be accessed by investors and simultaneously lower the stock price in the market to be reached by small capitalized investors. The combination of both more outstanding shares and lower stock price will boost the increase on trading volume so as to make the company's stocks become more liquid. Determination of split ratio by companies through stock splits provides information to investors regarding to the potential increase in stock price and liquidity after stock splits. |