Faithin Omaha eBook Collection

Download or read book Predicting Stock Splits with the Help of Prior Firm-Specific Experiences written by Kevin Krieger and published by . This book was released on 2007 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is evidence of abnormal stock returns at and following stock split announcements. The successful prediction of splits could enhance investor returns, but few studies try to do so. We hypothesize that a neglected aspect of prior prediction studies is companies that previously split with favorable stock market responses are more likely to split again. Firms in industries with a record of favorable post-split performance may also be more likely to split. We find that inclusion of these factors enhances split prediction accuracy. We find that when this factor is included our split prediction model leads to significant abnormal returns.