Journal ArticleDOI
An Empirical Test of the Redistribution Effect in Pure Exchange Mergers
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In this article, the authors examined the effect of one type of merger, pure stock exchange, on the values of the debt and equity of the firms involved and found that different forms of merger could have different effects on security values of firms involved.Abstract:
Merger transactions involve differing degrees of change in capital structure and asset distribution. As a result, different forms of merger could have different effects on security values of the firms involved. Previous empirical studies primarily used samples that included all types of mergers. The present study examines the effect of one type of merger, pure stock exchange, on the values of the debt and equity of the firms involved.read more
Citations
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The Hubris Hypothesis of Corporate Takeovers
TL;DR: The hubris hypothesis is advanced as an explanation of corporate takeovers by Jensen and Ruback as mentioned in this paper, who argued that the evidence supports the hubris hypotheses as much as it supports other explanations such as taxes, synergy, and inefficient target management.
Journal ArticleDOI
Corporate Takeover Bids, Methods of Payment, and Bidding Firms' Stock Returns
TL;DR: In this paper, the authors explored the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids and revealed significant differences in the abnormal returns between common stock exchanges and cash offers.
Journal ArticleDOI
The Effect of Corporate Multinationalism on Shareholders' Wealth: Evidence from International Acquisitions
TL;DR: In this paper, the effect of international acquisitions on stock prices of U.S. bidding firms was studied and the evidence was consistent with the theory of corporate multinationalism, predicting an increase in the firm's market value from the expansion of its existing multinational network.
Journal ArticleDOI
Factors influencing wealth creation from mergers and acquisitions: A meta‐analysis
TL;DR: This article analyzed the influence of various factors on shareholder wealth creation in mergers and acquisitions using a multivariate framework and found that while the target firm's shareholders gain significantly from M&A, those of the bidding firm do not.
Journal ArticleDOI
Measuring Abnormal Bond Performance
TL;DR: In this article, the empirical power and specification of test statistics designed to detect abnormal bond returns in corporate event studies, using monthly and daily data, were analyzed, and it was shown that test statistics based on frequently used methods of calculating abnormal monthly bond returns are biased.
References
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Journal ArticleDOI
The Pricing of Options and Corporate Liabilities
Fischer Black,Myron S. Scholes +1 more
TL;DR: In this paper, a theoretical valuation formula for options is derived, based on the assumption that options are correctly priced in the market and it should not be possible to make sure profits by creating portfolios of long and short positions in options and their underlying stocks.
Journal ArticleDOI
Capital asset prices: a theory of market equilibrium under conditions of risk*
TL;DR: In this paper, the authors present a body of positive microeconomic theory dealing with conditions of risk, which can be used to predict the behavior of capital marcets under certain conditions.
Journal ArticleDOI
Measuring security price performance
TL;DR: In this article, observed stock return data are employed to examine various methodologies which are used 111 event studies to measure security price performance, and abnormal performance is introduced into this data and misuse of any of the methodologies can result in false inferences about the presence of abnormal performance.
Book
Financial Theory and Corporate Policy
TL;DR: In this article, the authors present an overview of financial theory and its application in corporate finance, including the role of the CFO and performance measurement, and the relationship between CFO's role and performance measurement.
Journal ArticleDOI
Corporate forecasts of earnings per share and stock-price behavior - empirical tests
TL;DR: In this paper, the authors examined the common stock price behavior which accompanied the voluntary disclosure of 336 forecasts of annual earnings per share during the years 1963-67 and found that these forecast disclosures were accompanied by significant price adjustments, from which the inference may be drawn that either the data presented in a management forecast, the act of voluntary disclosure, or both, convey information to investors.