The Study Of Motivation And Market Reaction On High Stock Dividends And Splits

In recent years,the pursuit of High Stock Dividends and Splits become more and more serious,companies of High Stock Dividends and Splits significantly increased in both the number and the ratio.By studying motivation and market reaction on High Stock Dividends and Splits announcements,the author tried to find out the reason why it is so hot.The author had studied the annual report of listed companies from 2011 to 2015 to find out the reason why High Stock Dividends and Splits is so hot.After the study of motivation and market reaction of High Stock Dividends and Splits,the author found that "Signaling Theory",and "Catering Theory" of stock dividends can explain the listed companies' behavior on High Stock Dividends and Splits,while "Liquidity Theory" and "Capital Stock Expansion Theory" only can explain the listed companies' behavior of the Main board,"Price Illusion Theory" and "Catering Theory" of low price can't explain any of them.Further more,managers of listed companies in the Main board think highly of firm level factors,like company growth,the stock price and company size.So "Signaling Theory","Liquidity Theory" and "Capital Stock Expansion Theory" have great influence to managers of listed companies in the Main board.Managers of listed companies in GEM(growth enterprises market)think highly of investors level factors,like the stock dividend preference and the low stock price preference.So "Catering Theory" has great influence to managers of listed companies in GEM.In addition,the author also explores the Market reaction of listed companies on High Stock Dividends and Splits.The study shows that announcements of high stock dividends and splits gains a significant abnormal return,not only in main board but also in SME(small and medium enterprises)board and GEM(growth enterprises market).Besides,the author found that leakages of information is a common phenomenon in stock market of China.