This internship is about
the study on impact of stock announcements on share price behavior. Stock
announcement is an official public statement for a particular period of time
which contains company’s profitability which is made on yearly or quarterly
basis. A stock announcement is done on a specific date by the company in the
earning season and it is estimated by the equity analysts. For determining
stock price behavior equity analysts use random walk theory technique.
Under stock announcement
there are four categories namely,
Buy back of shares.
shares are issued by the company to the existing shareholders, according to
Companies’ Act, 2013 the bonus share are issued at free of cost and it should
be fully paid by the company who are issuing bonus shares. It is also known as
bonus share issue or bonus issue and it is issued on the basis of shares which
is already owned by the existing shareholders of the company. While issuing
bonus shares to the shareholders it increases the total number of shares issued
and owned by the company and the value of the company does not change. When the
number of issued shares are increased the ratio of existing shareholders will
be remained constant.
issue is a dividend of rights of the company’s existing shareholders to buy the
further securities in the company. It is issued in the public company for
raising their capital and it is also a tax free dividend on the ratio basis to
the existing shareholder of the company. It is either transferable or not,
shareholders have the rights to sell their subscription to others in open
market or they can own their subscription. Company’s existing shareholders have
the advantage of buying a specific number of shares at the quoted price within
the subsidy period fixed by the company.
back of shares means regaining of shares which was sold to their existing shareholders
by the companies at higher price when compare to the market price. There will
be tax advantage for the shareholders of the company. Buy back of shares can be
executed in two different ways namely, through offer for tender and through the
open market. When the company’s shares do not perform properly in the market, investors
can also argue with the company for buy back of shares.