Further evidence on the announcement effect of bonus shares in an imputation tax setting [An article from: Global Finance Journal]

This digital document is a journal article from Global Finance Journal, published by Elsevier in 2004. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
This study examines share price reaction to the announcement of bonus share issues for a sample of Australian companies over the period 1992 to 2000. The risk-adjusted price reaction from day 0 to day 1 is positive and statistically significant, averaging 2.37%. However, abnormal price reaction to bonus issue announcements is statistically significantly stronger for industrial nonfinancial companies and mining companies than financial companies. Finally, we find a significant positive cash flow performance, which is taken to indicate that companies that announced bonus share issues provide strong signals regarding their future performance.