The Reaction of Closed End Funds to Stock Distribution Announcements

Posted: 15 Mar 1999

See all articles by Vinay T. Datar

Vinay T. Datar

Seattle University

David A. Dubofsky

University of Louisville - Department of Finance

Abstract

This study examines the impact of stock split and stock dividend announcements made by closed end mutual funds. We argue that the asymmetric information / signaling hypothesis does not apply to mutual funds. Therefore, any announcement effects must be attributed to other factors such as the optimal trading range hypothesis. We find that closed end funds react no differently than other firms to stock distribution announcements; also, trading volume and turnover remain unchanged after closed end funds? ex-stock distribution days, while liquidity declines for other firms that distribute shares.

JEL Classification: G12, G14

Suggested Citation

Datar, Vinay T. and Dubofsky, David A., The Reaction of Closed End Funds to Stock Distribution Announcements. Available at SSRN: https://ssrn.com/abstract=152454

Vinay T. Datar

Seattle University ( email )

900 Broadway
Seattle, WA 98122
United States
206-296-2801 (Phone)
206-296-2486 (Fax)

David A. Dubofsky (Contact Author)

University of Louisville - Department of Finance ( email )

PO BOX 844000
Louisville, KY 40292
United States
502-852-3016 (Phone)
502-852-6072 (Fax)

HOME PAGE: http://cobweb2.louisville.edu/profile/Dubofsky.html

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