| Titre : |
Can a stock split be used to generate abnormal returns and does it lead to a higher performance? Focus on financial services industry |
| Type de document : |
Mémoire |
| Auteurs : |
Omar LAMZOURI, Auteur |
| Année de publication : |
2021 |
| Importance : |
39 p. |
| Note générale : |
Pour accéder aux fichiers PDF, merci de vous identifier sur le catalogue avec votre compte Office 365 via le bouton CONNEXION en haut de page. |
| Langues : |
Anglais (eng) |
| Mots-clés : |
Management
ACTION ; PRIX ; EFFICACITE ; FINANCE DE MARCHE ; CAPITALISATION BOURSIERE
|
| Résumé : |
We find it amazing to wonder about how really markets are functioning, whether they are reliable or not and whether they really reflect the true value of a company. These basic questions led us to think of a situation where the Efficient Markets Hypothesis can be empirically tested. We found some impressive financial events that are called stock splits and stock dividends. While those events do not generate any added value, their effect on the market value of a stock is subject to discussion. We believe that by studying how a stock reacts to the split we would be able to end up with a conclusion on this subject. Furthermore, we were wondering whether a stock split truly reflects a company’s ability to generate higher future performance, and if price changes are just investors’ reaction to the signal about an increasing performance of the firm. We also wanted to highlight the fact that stock splits have always been a subject of interest for finance academics, and in many ways. Some researchers were interested in analyzing market prices reaction after the split event, while others were more interested by the volatility of the stock. We also found many papers that tried to understand the reasons behind the stock’s behavior after the split. Explanations varied so largely, sometimes academics referred to market’s efficiency, investors reactions or even the dividends policy of the company, while some others explained it by the company’s characteristics, signaling theory or the way the split was announced. This rich and diversified theoretical background encouraged us to seek a sort of “Theory of everything” in the stock split area, and to try to explain splits by the most relevant and logical ideas. We will also focus on understanding a company’s performance after it has made a split. Since many believe that a split announcement is generally a sign of higher performance expectations, we will test this hypothesis and see whether the company truly perform better after the split. It’s quite relevant to this research because to our knowledge no other paper have treated this subject exactly with the same metrics that we are going to use. Another point worth mentioning is that we are trying to see whether a stock investor could benefit from the split by buying the stock at the announcement and selling it later. |
| Programme : |
MSc Corporate Finance |
| Permalink : |
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