Abstract

http://ssrn.com/abstract=315440
 
 

References (30)



 
 

Citations (2)



 


 



Do Stock Splits Signal Future Profitability?


Gow-Cheng Huang


Alabama State University - Department of Accounting and Finance

Kartono Liano


Mississippi State University - Department of Finance and Economics

Ming-Shiun Pan


Shippensburg University - Department of Finance and Management Information & Analysis

May 2002


Abstract:     
This study examines whether stock split announcements contain information content about future profitability, measured in terms of future earnings change, future earnings, or future abnormal earnings. Our sample includes 635 split announcements that have both a not-close-to-the-median post split share price and a low split factor. Our empirical results show little evidence that stock splits are positively related to future profitability. In fact, stock splits are in general negatively related to future profitability in subsequent years after the announcement. This negative relation holds regardless of future profitability measure. Therefore, our empirical finding suggests that stock splits are not useful signals of a firm's future earnings prospects.

Number of Pages in PDF File: 35

Keywords: Stock Splits, Signaling, Earnings

JEL Classification: G301

working papers series


Download This Paper

Date posted: September 17, 2002  

Suggested Citation

Huang, Gow-Cheng and Liano, Kartono and Pan, Ming-Shiun, Do Stock Splits Signal Future Profitability? (May 2002). Available at SSRN: http://ssrn.com/abstract=315440 or http://dx.doi.org/10.2139/ssrn.315440

Contact Information

Gow-Cheng Huang
Alabama State University - Department of Accounting and Finance ( email )
P.O. Box 271
Montgomery, AL 36101-0271
United States
334-229-6920 (Phone)
334-265-0914 (Fax)
Kartono Liano
Mississippi State University - Department of Finance and Economics ( email )
P.O. Box 9580
Mississippi State, MS 39762
United States
601-325-1981 (Phone)
601-325-1977 (Fax)
Ming-Shiun Pan (Contact Author)
Shippensburg University - Department of Finance and Management Information & Analysis ( email )
Shippensburg University
Shippensburg, PA 17257
United States
717-477-1683 (Phone)
717-477-4067 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 3,422
Downloads: 888
Download Rank: 13,393
References:  30
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.453 seconds