A stock split merely increases the number of shares of stock;it usually does not change retained earnings or paid-in capital.

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A stock split does not affect retained earnings or paid-in capital because it is only a division of the existing shares into smaller units, and not a change in the company's financial position or performance. The total value of the shares outstanding and the market capitalization of the company remain the same, but the number of shares held by each shareholder and the price per share may change. For example, if a company declares a 2-for-1 stock split, each shareholder would receive two shares for every one share they own, but the total value of their investment would not change.

A Stock Split Merely Increases the Number of Shares of Stock;it