Impact of Rights Issue on Share Returns of Firms Listed on The Nairobi Securities Exchange, Kenya

Show simple item record Ogada, Agnes Kalunda, Elizabeth 2017-10-05T14:56:46Z 2017-10-05T14:56:46Z 2017-08
dc.identifier.citation IOSR Journal of Business and Management (IOSR-JBM) Volume 19, Issue 8. Ver. VII (August 2017), PP 54-62 en_US
dc.identifier.issn 2278-487X
dc.description DOI: 10.9790/487X-1908075462 en_US
dc.description.abstract The study establish the impact of rights issue on share returns of firms listed on the Nairobi Securities Exchange. The study adopted an event study methodology which attempted to establish the information content of rights issue on share returns. The population of this study was 18 companies listed in the NSE. Secondary data collected spans 7 years from 2005-2012; share prices for 30 days before the announcement of rights issue and 30 days after the announcement date was used to generate actual returns, expected returns and abnormal returns. T test analysis was used to test whether there was significant difference on returns between the two periods before and after announcement date. Following the study findings, it was possible to conclude that the market return is a good predictor of stock returns hence the market model was validated. Finally, results led to the conclusion that the expected returns as well as the market returns were significantly higher after rights issue than before rights issue. However, abnormal returns were not significantly different implying that the information content of rights issues do not affect stock return and this may be an indicator of market efficiency. The unique contribution of the paper is that it will reduce the inconclusiveness that has been observed in empirical studies focusing on impacts of rights issue on stock returns en_US
dc.language.iso en en_US
dc.publisher IOSR Journal en_US
dc.subject Rights Issue en_US
dc.subject Nairobi Securities Exchange en_US
dc.subject Share Returns en_US
dc.subject Listed Firms en_US
dc.title Impact of Rights Issue on Share Returns of Firms Listed on The Nairobi Securities Exchange, Kenya en_US
dc.type Article en_US

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