Capital Market Reaction on Rights Issue Announcement

ABSTRACT: Corperation actions carried out by companies have the potential for information content as a signal. The purpose of this study is to retest and obtain empirical evidence regarding market reactions as mea.sured by abno.rmal ret.urns on the announcement of a rights issue. Testing the information content will be done by looking at the significance of the cumulative abnormal return. Thi.s rese.arch was con.ducted o.n 65 com.panies li.sted on the Indo.nesia St.ock Exc.hange (BEI) that conducted rights issues in 2014-2019. This
research is an evaluation study with an observation period when the announcement of the right issue. The sam.pling met.hod us.ed was nonprobability purposove sampling technique. T.he data analysis technique u.sed is the one sample t-test. The re.sults of the one sa.m.ple t-test sho.wed th.at the ma.rket did not react to the ann.ouncement of the right is.sue.
KEYWORDS : rights issue, abnormal return, capital market