A study on stock price reaction of bonus share announcement

Over the years, the corporate event announcement and its impact on stock price movement are one of the interesting and debatable issues among research scholars, analysts, fund mangers and policy makers. The corporate event and returns offered by stock are studied by many financial literatures. The scholars who are in favor of EMH, they are not agreeing with abnormal return at event announcement. Because the strong form of EMH viewed that the stock prices reflect all information and investors are not able to generate above average return. In the capital market the events like Bonus share, split share, right share, dividend announcement, earning announcement, change in BoD and change in capital structure create the headlines. According to strong-form of EMH, the capital market absorbs the event related information quickly and correctly.