{"id":{"repo_id":"uno","oai_identifier":"oai:scholarworks.uno.edu:td-1302"},"canonical_url":"https://search.dev.ndltd.org/etd/uno/oai:scholarworks.uno.edu:td-1302","repository":{"repo_id":"uno","name":"University of New Orleans","base_url":"https://scholarworks.uno.edu/do/oai/"},"display":{"title":"Utility Stock Splits: Signaling Motive Versus Liquidity Motive","abstract":"Despite the rich literature on theories of stock splits, studies have omitted public utility firms from their analysis and only analyzed split by industrial firms when examining managerial motives for splitting their stock. I examine the liquidity-marketability hypothesis, which states that stock splits enhance the attractiveness of shares to individual investors and increase trading volume by adjusting prices to an optimum trading range. Changes in the regulatory process, resulting from EPACT, have opened a window of opportunity for the study and comparison of the two traditional motives for splitting stock --signaling versus liquidity-marketability motives. Public electric utility firms provide a clean testing ground for these two non-mutually exclusive theories as liquidity/marketability hypothesis should dominate before the enactment of the EPACT since the conventional signaling theory of common stock splits should not apply given the low levels of information asymmetry in regulated utility companies. In the post-EPACT period, however, the signaling effect is expected to play a more dominant role. Based on both univariate and multivariate analyses, my results are consistent with the hypothesis posed. For the pre-EPACT period, liquidity motive seems to predominate in explaining the abnormal announcement return of utility stock splits. On the other hand, the results support the signaling motive as a leading explanation of abnormal returns in the post-EPACT period.","abstract_html":"Despite the rich literature on theories of stock splits, studies have omitted public utility firms from their analysis and only analyzed split by industrial firms when examining managerial motives for splitting their stock. I examine the liquidity-marketability hypothesis, which states that stock splits enhance the attractiveness of shares to individual investors and increase trading volume by adjusting prices to an optimum trading range. Changes in the regulatory process, resulting from EPACT, have opened a window of opportunity for the study and comparison of the two traditional motives for splitting stock --signaling versus liquidity-marketability motives. Public electric utility firms provide a clean testing ground for these two non-mutually exclusive theories as liquidity/marketability hypothesis should dominate before the enactment of the EPACT since the conventional signaling theory of common stock splits should not apply given the low levels of information asymmetry in regulated utility companies. In the post-EPACT period, however, the signaling effect is expected to play a more dominant role. Based on both univariate and multivariate analyses, my results are consistent with the hypothesis posed. For the pre-EPACT period, liquidity motive seems to predominate in explaining the abnormal announcement return of utility stock splits. On the other hand, the results support the signaling motive as a leading explanation of abnormal returns in the post-EPACT period.","abstract_has_math":false,"creators":["Miranda, Maria Mercedes"],"institution":null,"degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Economics and Finance","degree_department":null,"school":null,"contributors":["Mukherjee, Tarun","Whitney, Gerald","Speyrer, Janet"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2005,"date_issued":"2005-05-20T07:00:00Z","date_published":"2005-05-20T07:00:00Z","updated_at":"2026-07-24T05:28:16Z","subjects":["Utility industry","Information asymmetry","Stock splits"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://scholarworks.uno.edu/td/269","outbound_label":"Repository record","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["Mukherjee, Tarun","Whitney, Gerald","Speyrer, Janet"]},{"key":"dc:creator","label":"Author","values":["Miranda, Maria Mercedes"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"thesis:degree_discipline","label":"Discipline","values":["Economics and Finance"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Utility industry","Information asymmetry","Stock splits"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://scholarworks.uno.edu/td/269"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["Despite the rich literature on theories of stock splits, studies have omitted public utility firms from their analysis and only analyzed split by industrial firms when examining managerial motives for splitting their stock. I examine the liquidity-marketability hypothesis, which states that stock splits enhance the attractiveness of shares to individual investors and increase trading volume by adjusting prices to an optimum trading range. Changes in the regulatory process, resulting from EPACT, have opened a window of opportunity for the study and comparison of the two traditional motives for splitting stock --signaling versus liquidity-marketability motives. Public electric utility firms provide a clean testing ground for these two non-mutually exclusive theories as liquidity/marketability hypothesis should dominate before the enactment of the EPACT since the conventional signaling theory of common stock splits should not apply given the low levels of information asymmetry in regulated utility companies. In the post-EPACT period, however, the signaling effect is expected to play a more dominant role. Based on both univariate and multivariate analyses, my results are consistent with the hypothesis posed. For the pre-EPACT period, liquidity motive seems to predominate in explaining the abnormal announcement return of utility stock splits. On the other hand, the results support the signaling motive as a leading explanation of abnormal returns in the post-EPACT period."]},{"key":"dc:title","label":"Title","values":["Utility Stock Splits: Signaling Motive Versus Liquidity Motive"]}]}],"canonical_facts":{"dc:contributor":["Mukherjee, Tarun","Whitney, Gerald","Speyrer, Janet"],"dc:creator":["Miranda, Maria Mercedes"],"dc:description.abstract":["Despite the rich literature on theories of stock splits, studies have omitted public utility firms from their analysis and only analyzed split by industrial firms when examining managerial motives for splitting their stock. I examine the liquidity-marketability hypothesis, which states that stock splits enhance the attractiveness of shares to individual investors and increase trading volume by adjusting prices to an optimum trading range. Changes in the regulatory process, resulting from EPACT, have opened a window of opportunity for the study and comparison of the two traditional motives for splitting stock --signaling versus liquidity-marketability motives. Public electric utility firms provide a clean testing ground for these two non-mutually exclusive theories as liquidity/marketability hypothesis should dominate before the enactment of the EPACT since the conventional signaling theory of common stock splits should not apply given the low levels of information asymmetry in regulated utility companies. In the post-EPACT period, however, the signaling effect is expected to play a more dominant role. Based on both univariate and multivariate analyses, my results are consistent with the hypothesis posed. For the pre-EPACT period, liquidity motive seems to predominate in explaining the abnormal announcement return of utility stock splits. On the other hand, the results support the signaling motive as a leading explanation of abnormal returns in the post-EPACT period."],"dc:identifier":["https://scholarworks.uno.edu/td/269"],"dc:subject":["Utility industry","Information asymmetry","Stock splits"],"dc:title":["Utility Stock Splits: Signaling Motive Versus Liquidity Motive"],"thesis:degree_discipline":["Economics and Finance"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."]},"updated_at":"2026-07-24T05:28:16Z"}