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Stock distributions and the Retained Earnings Hypothesis revisited

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  • Heavilin, Jason E.
  • Songur, Hilmi

Abstract

Large stock distributions may be accounted for as stock splits or stock dividends. The Retained Earnings Hypothesis (REH) suggests that the latter method of accounting signals improving future cash flows, but prior evidence is mixed and the debate is still open. We use a large sample of stock distribution and document economically significant evidence consistent with the REH which helps resolve the open debate.

Suggested Citation

  • Heavilin, Jason E. & Songur, Hilmi, 2019. "Stock distributions and the Retained Earnings Hypothesis revisited," Finance Research Letters, Elsevier, vol. 30(C), pages 240-245.
    • Handle: RePEc:eee:finlet:v:30:y:2019:i:c:p:240-245
    DOI: 10.1016/j.frl.2018.10.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Stock split; Stock dividend; Retained Earnings Hypothesis;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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