A STUDY ON IMPACT OF CORPORATE ACTION ON STOCK PRICE
Abstract
Do you at any point notice that the price of a share of a specific share of a company is falling or raising? A fluctuation occurs in the price level of stock because of changes in various factors like external and internal environment. Stock market is volatile. Behind these factors’ information released by the corporate public companies effect volatility in security prices. As corporate actions may impact the company’s share price, many financial analysts observe stock performance on the announced date and consider it is a gauge of how the market will treat the news about particular company. Depending upon risk and return characteristics of individual share. Any investor attempts to choose the most desirable securities and like to allocate his funds over this group of securities. Announcement like dividend, splits, merger and acquisitions of company any internal and external users of information interested in it. These corporate actions play a vital role in the change in security prices in time span. In the search of news with respect to company investor primary depends of fundamental data. A part from these sources he looks at press release announced in the market. According theory of efficient market, states it is impossible to beat the market because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.
