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The purpose of this article is to test the efficiency of TSE. The
semi - strong form of market efficiency was tested by answering
two questions:
1- Has there been any abnormal rate of return on common
stocks which were splitted?
2- If the answer to the first question is positive to what extent
the stock split can be considered a determinant factor in stock price changes and whether other factors such as earnings or
dividends are resposible for price changes.
The result showed that TSE is not an efficient market and


investors do not have enough information regarding the effect of stock splits or stock dividends. The results also showed that with
the passage of time Iranian investors became more sophisticated and they no longer consider stock dividend as valuable as before.
The study also demonstrated that consequent to stock dividend and stock split, no improvement in the profit of corporations was observed