Thirty Years of Stock Splits, Reverse Stock Splits, and Stock Dividends in Canada

32 Pages Posted: 14 Apr 2005

See all articles by Vijay M. Jog

Vijay M. Jog

Carleton University - Eric Sprott School of Business

Peng Cheng Zhu

University of the Pacific - Eberhart School of Business

Date Written: June 2004

Abstract

We use thirty years of Canadian evidence to shed light on the implications of Stock Splits, stock dividends and reverse splits. We focus on the period around -60 months to +60 months of the event month and examine changes in returns, eps, betas, trading volume, number of transactions and P/E ratios. Our results indicate that there is no information signalling since the performance of stocks in the post-event period is less than pre-event but there is an increase in the trading volume but the per transaction trading volume decreases considerably. This evidence supports the optimum price hypothesis and a change in the shareholder composition. In addition we show that there is a permanent change in the valuation parameter as denoted by P/E ratios possibly as a result of a shift between institutional investors to individual investors.

Keywords: stock splits, stock dividends, reverse stock split

JEL Classification: G32, G35

Suggested Citation

Jog, Vijay M. and Zhu, Peng Cheng, Thirty Years of Stock Splits, Reverse Stock Splits, and Stock Dividends in Canada (June 2004). Available at SSRN: https://ssrn.com/abstract=692941 or http://dx.doi.org/10.2139/ssrn.692941

Vijay M. Jog (Contact Author)

Carleton University - Eric Sprott School of Business ( email )

1125 Colonel By Drive
Ottawa, Ontario K1S SB6
Canada
613-520-2600 (Phone)
613-520-4427 (Fax)

Peng Cheng Zhu

University of the Pacific - Eberhart School of Business ( email )

3601 Pacific Ave.
Stockton, CA 95211
United States
209-946-3904 (Phone)
209-946-2586 (Fax)

HOME PAGE: http://138.9.110.12/x31140.xml

Register to save articles to
your library

Register

Paper statistics

Downloads
573
rank
45,682
Abstract Views
2,733
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information