A stock split occurs when a company divides its existing shares into multiple new shares to increase the number of shares outstanding. For example, in a 2-for-1 stock split, each shareholder receives an additional share for every share they own, effectively doubling the total number of shares while halving the share price. This does not change the overall market capitalization of the company. Companies often perform stock splits to make their shares more affordable for investors, potentially attracting a broader range of buyers. While a stock split can enhance liquidity and trading volume, it does not alter the fundamental value of the company or its stock price.