A share split, also known as a stock split, is a corporate action where a company divides its existing shares into multiple shares, increasing the total number of outstanding shares while maintaining the same overall market capitalization. The split ratio is typically expressed as a fraction, such as 2-for-1 or 3-for-1, indicating the number of new shares issued for each existing share.

The primary reason for a share split is to make the company's stock more accessible and affordable to a broader range of investors. As a company's stock price rises over time, it may become relatively expensive, deterring smaller investors from buying shares. By implementing a share split, the company effectively reduces the share price proportionally, making it more affordable for retail investors.

Share splits do not impact the total value of shareholders' investments since the split is accompanied by a proportional increase in the number of shares held. For example, in a 2-for-1 stock split, an investor who held 100 shares before the split would have 200 shares after the split, with the share price halved.

Furthermore, share splits can enhance liquidity in the stock, as a larger number of shares are available for trading. Increased liquidity can lead to tighter bid-ask spreads and make it easier for investors to buy and sell shares without significantly affecting the stock's price.

Overall, a share split is a strategic move aimed at improving accessibility, liquidity, and investor interest in a company's stock while maintaining its overall market value. It is important to note that a share split is different from a stock dividend, where shareholders receive additional shares as a form of dividend payment.

A share split, also known as a stock split, is a corporate action in which a company divides its existing shares into multiple shares, thereby increasing the total number of outstanding shares while proportionally decreasing the share price. The most common type of share split is a 2-for-1 split, where shareholders receive two shares for every one they previously held.

Share splits are implemented for various reasons. One primary objective is to make the stock more affordable for a broader range of investors, potentially attracting new shareholders. By lowering the share price, a company aims to increase liquidity in its stock and enhance market accessibility. Additionally, share splits do not alter the overall market capitalization of the company or the value of an investor's total holdings, as the increased number of shares is offset by a proportionate decrease in share price. Overall, share splits are strategic moves to adjust the stock's price and increase its market appeal.