Long-Run Common Stock Returns Following Stock Splits and Stock Dividends
Publication Date
8-25-1998
Abstract
We examine one-to three-year performance of common stocks following stock split and stock dividend announcements made during the period 1976 to 1991. The average one-and three-year buy-and-hold abnormal returns after the announcement month are 8.19% and 7.55% respectively. Also, smaller firms exhibit larger announcement period as well as larger one-to three-year abnormal returns. The results cannot be explained away by general cash-dividend increase announcements or earnings announcements. Overall, the results are consistent with the hypothesis that the market underreacts to the stock split and the stock dividend announcements.
Document Type
Article
Disciplines
Accounting
Source
SMU Cox: Accounting (Topic)
Language
English
COinS
