Efficient Market Hypothesis: Evidence from Bonus Issue

Researchers stated that bonus issue gave a signal that stock prices would increase in the next one or two years. A study conducted by Money Today on the top 30 companies (as per market capitalization) which announced bonus issues between January 2001 and July 2010 showed that in most cases the share price rose on the record day as well as one year after the record date (Refer to Exhibit II). Out of the 30 sample companies in the study, the share price of 21 companies increased till the record date. Also, the share price of 24 companies rose within a year of the record date...