Why do companies execute stock splits?

Question

Why do companies execute stock splits?

Answer 1

One reason companies do this is to make the price more attractive to potential investors. A stock worth $100 will be more attractive to potential investors if it went through a 2 for 1 split, making shares worth $50. Also, it makes it looks better to buyers that want to buy round lots of a stock regardless of the price.

Answer 2

Yes, as it creates no value it is seemingly useless.  There is an undeniable psychological effect, however, of a stock split which can be showcased by 1.) the fact that prospective buyers don't have to pay as much per share and 2.) current owners of the stock now have twice as much.

People who promote investing in a company because its stock is going to split are generally ignorant.  It should generally never be a deciding factor in any investment decision.