Lydia Angela Natasya_Abstract_1732013

Lydia Angela Natasya
Tarsisius Renald Suganda
Fakultas Ekonomi dan Bisnis Universitas Ma Chung Malang
Villa Puncak Tidar N-01, Malang, 65151.

Korespondensi dengan Penulis:
Tarsisius Renald Suganda: Telp. + 62 341 550 171;  Fax. +62  341 550 175

The aim of this paper was to investigate the market reaction of bonus share announcement in Indonesia Stock Exchange. Bonus share was the signal given by company to public or stockholders. If bonus shares announcement consisted of the information, it would be reacted by the market. There were pro’s and con’s about the finding of bonus share’s announcement. The Standard of event study method had been used for the purpose of studying the bonus share issues announcement reaction. The proxies of market reaction were abnormal return and trading volume activity. In this study, the researcher found a significant negative abnormal return and it meant that the announcement of bonus share had negative information content. This finding probably meant that most companies had liquidity problem. The study also found that the average of trading volume activity was insignificantly decreased after bonus share announcement. This empirical study showed that bonus share indicated a bad signal for the Indonesia market.

 Keywords: abnormal return, bonus share, information content, trading volume activity  

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