A stock split involves dividing each share into multiple parts. Since no capital is added, the nominal value of each share will decrease because the denominator in the formula (nominal value = share capital/total number of shares issued) increases. Although shareholders will own more shares after the split, their relative ownership of the company remains unchanged. Similarly, although the nominal value of each share is smaller (i.e., each share represents a smaller portion of the total number of shares issued), the total value of a shareholder's shares remains the same.
The purpose of a stock split is usually to make the price of each individual share lower and more manageable, even though the total value of the company remains unchanged. This is especially common in companies listed on a stock exchange, companies conducting public offerings, or those with incentive programs aimed at employees and other strategic individuals.