Impact of stock splits on stock price performance of selected companies in Indian context
AbstractThis paper aims to investigate the impact of stock splits on the stock price performance of selected companies in the Indian stock market. A purposive sampling method was employed, and a sample of 20 stock splits announced by BSE-listed companies from the beginning of April 2006 to the end of September 2008 was selected pertaining to different sectors. The study employs the market model-event study methodology with an event window of 81 days (40 days prior to split and 40 days post-split) and split announcement date (An date, t0) as the event date, to examine the market reaction. The findings indicate that the market is found to react positively with significantly positive average abnormal results on t0 and very near to the An date especially evident during t−1 to t+1. The empirical results find the semi-strong form of efficient market hypothesis to be true in the Indian context.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal Afro-Asian J. of Finance and Accounting.
Volume (Year): 2 (2011)
Issue (Month): 3 ()
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Web page: http://www.inderscience.com/browse/index.php?journalID=214
stock splits; market model; event study; stock returns; India; stock price performance.;
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