How does a forward stock split primarily affect existing shareholders?

In the context of a forward stock split, the correct understanding is that it neither decreases the market value of existing shareholders' total holdings nor alters their ownership percentage significantly.

A forward stock split increases the number of shares outstanding while proportionally decreasing the share price, such that the overall market value of a shareholder's investment remains the same immediately following the split. For example, if a company performs a 2-for-1 forward stock split, shareholders will hold double the number of shares, but each share will be worth half of what it was previously. Thus, if a shareholder had 100 shares valued at $10 each before the split (totaling $1,000), after the split they would have 200 shares valued at $5 each, still totaling $1,000. This highlights that the ownership and market value remain intact.

Furthermore, the stock split does not affect voting rights since shareholders still retain the same proportion of ownership in the company, and the total number of votes is simply divided among the increased number of shares. Therefore, the best choice accurately reflects that a forward stock split primarily does not affect ownership percentages or market value in a negative way.