The motivations underlying stock splits and bonus issues

Osornprasop, Rapeepan. (1999). The motivations underlying stock splits and bonus issues Master's Thesis, School of Business, The University of Queensland.

       
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Author Osornprasop, Rapeepan.
Thesis Title The motivations underlying stock splits and bonus issues
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1999
Thesis type Master's Thesis
Total pages 55
Language eng
Subjects 1503 Business and Management
Formatted abstract This research report examines the explanations proposed to explain why managers conduct stock splits and bonus issues in Australia during the period between January 1991 and December 1997. The three leading explanations of stock splits and bonus issues that have emerged in the finance literature are the trading range hypothesis, the liquidity hypothesis, and the signalling hypothesis. As the theories suggest, this study hypothesizes that the rate of return, the earnings performance, the shareholders' dividend yield, the trading volume, and the trading value of the stock splitting and bonus issuing firms will improve after each of the two events. Although the examinations yielded mixed results, the clear rising patterns of shareholders' dividend yield and trading volume support the signalling and the liquidity hypotheses and hence it could be concluded that firms conduct stock splits and bonus issues to signal favourable information about their future cash flows as well as to increase the market liquidity of their shares.

 
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Created: Wed, 29 Sep 2010, 16:33:21 EST by Muhammad Noman Ali on behalf of Social Sciences and Humanities Library Service