Year: 2024
Type: article
Abstract: ABSTRACT If stock splits are used by managers to convey private information to the public, we hypothesize that the information content of splits should be related to the information managers reveal during quarterly earnings announcements. Supporting this hypothesis, we find that post‐split stock returns and operating earnings growth are positively correlated with the 5‐day returns around the last earnings announcement prior to the splits. This relationship holds even after controlling for different characteristics, including size, book‐to‐market, and momentum. These findings add new evidence to the rich literature on the signaling hypothesis regarding the motivation behind this corporate event.
DOI: 10.1002/jcaf.22754
Authors: Hoang Huy Nguyen, Duong Nguyen, Hao Manh Quach, The Anh Pham
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4402783281