Several theories like optimal trading range hypothesis, liquidity hypothesis, signaling hypothesis have been advanced in relation to this non-economic corporate event. But still there is need to study the investors' optimizing behavior after stock split. With this focus on optimization of the...

The idea of this study was inspired by the learning behavior of the financial market developed by Pastor and Veronesi (2003). This study examines the relationship between stock split activity and company age. This paper finds that companies at younger age tend to split their stocks more often...

This paper reviews various studies of forward and reverse stock splits in the areas of motives for splits, split practices, split effects on firm value, and changes in market activities around splits. It focuses on three hypotheses and their extended evidence. As our analysis shows, the optimal...

Most of stock splits announcements in France display as primary objective to facilitate access to the securities for individual investors and to improve liquidity. The existence of standards or preferences from investors in terms of price level, and especially a preference for low priced stocks...

Stock splits have long presented a puzzle in finance. Unresolved questions are why do firms undertake them, and why do they offer abnormal returns both before and after the announcement date? Conventional explanations focus on making stocks more liquid and signaling firm prospects. However,...

This paper examines why firms choose to pay stock dividends. Using a sample of listed Chinese firms, we find that younger, more profitable firms, with lower leverage, high levels of retained earnings, private ownership prior to listing, investing more in fixed assets and operating in regions...

Stock splits have attracted the attention of academicians and practitioners for a long time. Many debates revolve around these often called „cosmetic” events that do not bring about any direct valuation implications. In spite of their simplicity and theoretically no motivation for any...

The percentage of firms undertaking stock splits has fallen from a peak of 23% in 1982 to less than 1% in 2009. Controlling for time trends and other economic determinants, the declining incidence of stock splits is significantly associated with a drop in household investors' equity holdings and...

We show that three proxies for stock price informativeness, adjusted probability of information based trading (AdjPIN), price non-synchronicity and probability of information-based trading (PIN), decrease significantly due to an enlarged investor base after stock splits. The results are...