Studies of stock splits indicate that one could make excess returns by investing in stocks after splits occur.

Question

Quizplus · Accepted Answer

Studies generally show that while stocks may experience a temporary increase in value after a split due to perceived affordability and increased liquidity, consistently making excess returns solely based on stock splits is not supported by evidence. Over the long term, returns are more closely tied to the company's fundamental performance rather than the split itself.

Studies of Stock Splits Indicate That One Could Make Excess