The Differences Between Stock Splits and Stock Dividends

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The Differences Between Stock Splits and Stock Dividends

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dc.contributor.author Bechmann, Ken L. en_US
dc.contributor.author Raaballe, Johannes en_US
dc.date.accessioned 2009-02-04T10:26:19Z
dc.date.available 2009-02-04T10:26:19Z
dc.date.issued 2004-03-23T00:00:00Z en_US
dc.identifier.isbn 8790705750 en_US
dc.identifier.uri http://hdl.handle.net/10398/7181
dc.description.abstract Abstract It is often asserted that stock splits and stock dividends are purely cosmetic events. However, many studies have documented several stock market effects associated with stock splits and stock dividends. This paper examines the effects of these two types of events for the Danish stock market. Consistent with the existing literature, the two events are associated with a significantly positive announcement effect of ap- proximately 2.5%. However, when examining the two events more carefully, several important results are obtained. First, a firm's motivation for announcing the two events is completely different. Second, the positive stock market reaction is closely related to associated changes in a firm's payout policy, but the relationship varies for the two types of events. Finally, there is only very weak evidence for a change in the liquidity of the stock. On the whole, after controlling for the firm's payout policy, the results suggest that a stock split is a cosmetic event and that a stock dividend on its own is considered negative news. Key words: Stock splits; Stock dividends; Cash dividends; Signaling; Liquidity en_US
dc.format.extent 32 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;2004-1 en_US
dc.subject.other aktiekurser en_US
dc.subject.other aktiemarkeder en_US
dc.subject.other danmark en_US
dc.subject.other dividende en_US
dc.subject.other aktiesplit en_US
dc.subject.other aktiestørrelse en_US
dc.title The Differences Between Stock Splits and Stock Dividends en_US
dc.type wp en_US
dc.accessionstatus KAT04mar22 lano en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.corporation Aarhus University en_US
dc.contributor.department Institut for Finansiering en_US
dc.contributor.departmentshort FI en_US
dc.contributor.departmentuk Department of Finance en_US
dc.contributor.departmentukshort DF en_US
dc.idnumber 8790705750 en_US
dc.publisher.city København en_US
dc.publisher.year 2004 en_US
dc.title.subtitle Evidence from Denmark en_US


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