This research attempts to discriminate empirically between the predictable events and resolution irrelevancy hypotheses as both pertain to abnormal stock price performance around regular and special proxy statement mailing dates and the related shareholder meeting dates. We find no evidence that these events result in the positive wealth effects suggested by the predictable events hypothesis. We do find evidence of increased idiosyncratic stock price volatility or information flow around special meeting proxy statement mailing dates and special meeting dates. Thus, our evidence supports the resolution irrelevancy hypothesis.
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Zdanowicz, J.S., Sanders, R.W. Some evidence on Ross' resolution irrelevancy hypothesis. Rev Quant Finan Acc 5, 291–308 (1995). https://doi.org/10.1007/BF01074843
- resolution irrelevancy hypothesis
- event testing
- predictable events hypothesis