This study examines share price reaction to announcement of bonus share issues of Australian companies (equivalent to stock dividends in the US and scrip issues in the UK). Price reaction to bonus issue announcements from the day of the announcements to the day after the announcements (day 0 to...

We examine the price and volatility reaction around stock dividend ex-dates for an Australian sample, over the period January 1992 to December 2000. We find that price reaction around stock dividend ex-dates provides positive abnormal returns both prior, and subsequent, to the abolishment of par...