A stock split is a corporate action in which a company increases the number of its outstanding shares by proportionately reducing the face value of each share. For example, in a 2-for-1 stock split, each existing share becomes two shares, while the market price per share is adjusted accordingly. The total value of an investor's holdings and the company's overall market capitalization remain unchanged immediately after the split. Companies may undertake a stock split to make their shares more affordable for investors, improve trading liquidity, and encourage broader market participation. However, a stock split does not change the company's underlying fundamentals or intrinsic value.
