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Right Issue

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-Journal of Arts, Science & Commerce ■ E-ISSN 2229-4686 ■ ISSN 2231-4172

AN EMPIRICAL ANALYSIS OF IMPACT OF RIGHT ISSUES ON SHAREHOLDERS RETURNS OF INDIAN LISTED COMPANIES

Pooja Miglani Assistant Professor PG Deptt. of Commerce & Management Apeejay College of Fine Arts, Jalandhar, Punjab, India

ABSTRACT This study explores the impact of right shares issued by Indian companies that took place during 2005 & 2010. The samples of 32 right issues have been used to study the announcement effect. The study examines the stock price reaction to information content of right issues with a view of finding whether Indian stock market is semi-strong efficient or not. The standard event study methodology has been used for the purpose of examining the right issue announcement reaction. The study reveals statistically significant abnormal returns on the announcement & surrounding dates.

Keywords: Right Issue, Event study, Announcement date, Abnormal returns

International Refereed Research Journal ■ www.researchersworld.com ■ Vol.– II, Issue –4,Oct. 2011 [169]

-Journal of Arts, Science & Commerce ■ E-ISSN 2229-4686 ■ ISSN 2231-4172

INTRODUCTION: This paper is organized as follows: Section I includes this introductory exposition. It includes two parts. Part 1 specifies meaning of right shares & growth/quantum of right issues in India & Part 2 Reviews the pertinent literature. Section II gives details of methodology. It further includes part 1 of data Sources & part 2 of data Design. Section III presents empirical results & discussion & section IV gives the conclusion. MEANING OF RIGHT SHARES & GROWTH/QUANTUM OF RIGHT ISSUES IN INDIA: Right issues are the options given by a company to the existing shareholders to buy the shares of the company. It is also known as right of Pre-emption. As per the Companies Act1956 whenever a company wants to issue additional shares

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