Measurment of stock liquidity criteria surrounding capital raising decisions

Subject Areas : Journal of Investment Knowledge

Ebrahim Abbasi ¹ , Alireza Rajabpour ²

1 - Associate professor at Al.zahra university ,Tehran,Iran
2 - Master of finance

Received: 2013-04-30 Accepted : 2013-10-12 Published : 2013-10-12

Keywords: Liquidity criteria, Capital raising, Stock right, Stock dividend,

Abstract :

This study investigates the explaining ability of the stock liquidity criteria before and after capital raising decisions by using stock rights and stock dividends.For this purpose liquidity criteria including trading volumes, trading value, number of trading days, trading frequency and the number of buyers are investigated.This study includes are month before closing  the symbol and one month after opening the symbol following extra ordinary assemblies on stock right and stock dividends issue.This paper investigates 215 capital raising cases during 2005-2010 years in Tehran stock exchange. The results of the pairs t-test demonstrated that the mean liquidity criteria after capital raising in comparasion with before that doesen’t have any significant differences. But there is significant and positive correlation between percent of capital raising with liquidity criteria.