IMPACT OF STOCK SPLITS ON LIQUIDITY
IMPACT OF STOCK SPLITS ON LIQUIDITY

Summary/Abstract: In this paper the event analysis is applied to measure the impact of stock splits on companies’ liquidity. Although it is difficult to find relationship between stock splits and trading volume for particular companies, the results are statistically valid for the whole sample of companies. In this case the stock split could be a vehicle for increasing company’s liquidity and reducing investor’s investment risk.

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