The valuation effects of stock splits in NASDAQ

Managerial Finance - Tập 32 Số 5 - Trang 401-414 - 2006
KaterinaLyroudi1, ApostolosDasilas1, AntoniosVarnas2
1Department of Accounting and Finance, University of Macedonia, Thessaloniki, Greece
2Del Monte, Larisa, Greece

Tóm tắt

PurposeTo investigate whether a stock split is still considered a policy that creates value for the underlying company and the rationale behind such action for companies listed on the NASDAQ.Design/methodology/approachThe event study methodology of Strong is employed to examine the announcement effect of stock splits on stock prices.FindingsThe results indicate a positive market reaction at the stock split announcement and that the liquidity hypothesis explains well the rationale for the stock splits.Research limitations/implicationsThe sample is quite small (57 observations) and the examination period is limited to 1999 and 2000.Practical implicationsFindings are of particular interest to researchers, practitioners and investors that have an interest in firms listed on NASDAQ.Originality/valueLimited research on the stock price behaviour of firms listed on NASDAQ around stock split announcement date.

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Managerial Finance

Tập 32 Số 5

401-414

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