The market's response to recurring events - The case of stock splits

• 成果类型: Article
• 署名作者: Pilotte, E; Manuel, T
• 署名单位: University of Montana System; University of Montana
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/0304-405X(95)00859-D
• 发表日期: 1996
• 页码: 111-127
• 关键词: STOCK SPLITS; price response; EARNINGS INFORMATION

摘要

A substantial body of literature suggests that stock splits convey information. In this paper we extend this literature by examining firms that split their stock at least twice during 1970-1988. We focus on firms with multiple splits to provide evidence on the market's use of previous split experience in interpreting a recurring event. Our major findings are that stock price responses to both stock splits and post-split earnings changes depend on earnings realizations observed after previous splits. These findings support the conclusion that the market uses previous split experience to interpret a recurring event.