geez, an excellent question, the article is very general in that regard and just refers to stock splits, no ratios. i have found a second reference which instead of calling the returns abnormal called them excess, defined as the difference between actual and expected. it also contains a graph illustrating the compounded residual(excess) returns prior to the announcement. this graph looks like the right side of a cup and handle, with the handle starting immediately the day of the announcement. it also states the stocks that did increase dividends continued beyond the split with excess returns, as opposed to the flattening from the other reference. as for a company that did not increase the results were the same. this study of the semistrong efficiency theory is very interesting, looking further, it specifically addresses the expectations of price based on various events, and if some are uncertain as to how events will affect the price this may be a good read. some examples include, earnings, accting changes, world events, firms acquiring other firms, analyst recommendations.these may be basic, but it is good reading.
i will continue to search the net to see if i can find anything if interested.
as i had a little trouble with the article in some aspects, what is your intrepretation?
i will also put something together on the sources and use statement over the next few days... |
