A stock split is a corporate action where a company divides its existing shares into multiple new shares. This process increases the number of shares outstanding while reducing the share price proportionally, so the overall market capitalization remains the same. For example, in a 2-for-1 stock split, each shareholder receives an additional share for every share they own, effectively halving the share price. Companies often perform stock splits to make their shares more affordable for investors, potentially increasing liquidity and attracting more buyers. A stock split does not change the value of a shareholder's investment; it simply alters the number of shares owned and their price per share.