Final answer:
In a stock split, the total number of shares increases and the price per share decreases, but the overall investment value remains unchanged.
Step-by-step explanation:
During a stock split, the overall value of an investor's position does not fundamentally change. What happens is that the total number of shares they own increases, but the price of each share is adjusted downward accordingly. For example, in a 2-for-1 stock split, an investor who owned 100 shares priced at $100 each would now own 200 shares priced at $50 each. Although the number of shares owned has doubled, the total value of the investment remains the same at $10,000. Firms may decide to split their stock for various reasons, such as to make shares more affordable for investors, or to increase liquidity in the stock.