O desempenho financeiro das empresas e o desdobramento de ações – o caso das empresas do índice S&P500

Maria Teresa Garcia () and João Pedro Vargues Simões

No 2023/01, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: The main purpose of this study is to understand the relationship between companies’ performance and Stock Splits (SS), using two measures of performance: return on assets ratio (ROA) for each company and earnings (EARNINGS) measured as the net income after taxes for each company. This analysis is made through two multiple linear regressions in order to assess the statistical significance of SS in the explanation of the two alternative dependent variables. The independent and control variables are usually considered as relevant determinants for companies’ performance. The analysis was conducted with a final sample of 437 companies from the S&P500 index and between the years of 2005 and 2015, inclusive, and with a total of 235 SS done over the 11 years of period analysis. Results found showed that the variable SS has a statistical significance at 5% just for the first regression (ROA) while that for the second regression (EARNINGS) there is no longer a statistical significance for the Earnings of studied companies, which shows that for the first regression there are evidences that there is a positive linear relation between variable SS and variable ROA. This empirical result could be acknowledge as a support for the signaling theory, where this theory has as main hypothesis that managers decide to split their shares to signal the market that their companies will have favorable future performances and earnings.

Keywords: stock splits; performance; roa; earnings; signaling theory. JEL Classification: G14 (search for similar items in EconPapers)
Date: 2023-01
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Working Paper: O desempenho financeiro das empresas e o desdobramento de ações – o caso das empresas do índice S&P500 (2023)
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