Is Share Price Related to Marketability? Evidence from Mutual Fund Share Splits
Financial Management, Vol. 28, No. 3, Autumn 1999
Posted: 16 Aug 2001
There are 2 versions of this paper
Is Share Price Related to Marketability? Evidence from Mutual Fund Share Splits
97-06
Number of pages: 31
Posted: 19 Oct 2003
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Abstract
We examine the "marketability hypothesis," which states that stock splits enhance the attractiveness of shares to investors by restoring prices to a preferred trading range. We examine splits of mutual fund shares because they provide a clean testing ground for the marketability hypothesis, since the conventional rationales for common stock splits do not apply. We find that splitting funds experience significant increases (relative to non-splitting matched funds) in net assets and shareholders. Stock splits do appear to enhance marketability.
Suggested Citation: Suggested Citation
Fernando, Chitru S. and Krishnamurthy, Srinivasan and Spindt, Paul A., Is Share Price Related to Marketability? Evidence from Mutual Fund Share Splits. Financial Management, Vol. 28, No. 3, Autumn 1999, Available at SSRN: https://ssrn.com/abstract=267699
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