Abstract :
This research aims to examine the effect of the overpriced stock prices, the company?s financial performance and liquidity of stock trading to the company?s decision to do a stock split. The overpriced stock price measured by the Price Earning Ratio and Price to Book Value, the company?s financial performance is measured by Earning Per Share, and liquidity of stock trading volume is measured by the Trading Volume Activity. Analysis tools will be used in this research is the logistic regression. This research a sample amounted to 25 go public companies that do the stock split and 25 go public companies who do not do stock split during the period 2001-2010. The result of this research show that the overpriced stock prices, the company?s financial performance and liquidity of stock trading did not have a significant effect to the company?s decision to do a stock split. the result are not consistent with Signalling Theory and Trading Range Theory.
Keyword : Stock split, overprice, financial performance and liquidity of stock
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