Journal of Financial Economics Vol. 13 No. 4 1984

The valuation effects of stock splits and stock dividends

Mark Grinblatt^1,2; Ronald W. Masulis²; Sheridan Titman^1,2,3

¹ National Bureau of Economic Research · ² University of California, Los Angeles · ³ The University of Texas at Austin

Abstract

This study presents evidence which indicates that stock prices, on average, react positively to stock dividend and stock split announcements that are uncontaminated by other contemporaneous firm-specific announcements. In addition, it documents significantly positive excess returns on and around the ex-dates of stock dividends and splits. Both announcement and ex-date returns were found to be larger for stock dividends than for stock splits. While the announcement returns cannot be explained by forecasts of imminent increases in cash dividends, the paper offers several signalling based explanations for them. These are consistent with a cross-sectional analysis of the announcement period returns.

DOI

10.1016/0304-405x(84)90011-4

Volume

13

Issue

4

Pages

461-490

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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