Are stock market event studies affected by the price range of shares? The Canadian experience
Robert Hanrahan, Joseph Kushner, Isidore Masse
Abstract
Robert Hanrahan, Joseph Kushner, Isidore Masse
Abstract
This study uses event date methodology to examine whether low priced and high priced shares respond differently to market events. Our results indicate that in response to takeover announcements, low priced shares are more price volatile and unlike higher priced shares decline after the event date. Recognition of share prices should therefore be considered in event studies and in particular when comparing the results of different studies.
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This study uses event date methodology to examine whether low priced and high priced shares respond differently to market events. Our results indicate that in response to takeover announcements, low priced shares are more price volatile and unlike higher priced shares decline after the event date. Recognition of share prices should therefore be considered in event studies and in particular when comparing the results of different studies.
Key concepts: Event study, Share price, Market share, Economics, Stock price, Financial economics, Stock dilution, Stock market