In this paper, the link between stock distribution announcements and capital markets is examined. The results show that stock split announcements result in higher share prices and narrower percentage bid‐ask spreads, while stock dividend announcements have little effect on either prices or...

This paper considers a regulatory model where regulators have less demand information than the firm. Although the firm can over‐earn because of that asymmetry, regulators will ultimately notice. From the company's perspective it may be preferable to eliminate the regulators' uncertainty,...