The Valuation of Conglomerate Companies

The Valuation of Conglomerate Companies

Date: May 1969
Creator: Betty, Winfield Parker, 1937-
Description: This dissertation investigates the sources of growth which are available to conglomerate companies and draws some limited conclusions with regard to which are the major sources.
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The Effect of SFAS No. 141 and SFAS No. 142 on the Accuracy of Financial Analysts' Earnings Forecasts after Mergers

The Effect of SFAS No. 141 and SFAS No. 142 on the Accuracy of Financial Analysts' Earnings Forecasts after Mergers

Date: May 2005
Creator: Mintchik, Natalia Maksimovna
Description: This study examines the impact of Statements of Financial Accounting Standards No. 141 and No. 142 (hereafter SFAS 141, 142) on the characteristics of financial analysts' earnings forecasts after mergers. Specifically, I predict lower forecast errors for firms that experienced mergers after the enactment of SFAS 141, 142 than for firms that went through business combinations before those accounting changes. Study results present strong evidence that earnings forecast errors for companies involved in merging and acquisition activity decreased after the adoption of SFAS 141, 142. Test results also suggest that lower earnings forecast errors are attributable to factors specific to merging companies such as SFAS 141, 142 but not common to merging and non-merging companies. In addition, evidence implies that information in corporate annual reports of merging companies plays the critical role in this decrease of earnings forecast error. Summarily, I report that SFAS 141, 142 were effective in achieving greater transparency of financial reporting after mergers. In my complementary analysis, I also document the structure of corporate analysts' coverage in "leaders/followers" terms and conduct tests for differences in this structure: (1) across post-SFAS 141,142/pre-SFAS 141, 142 environments, and (2) between merging and non-merging firms. Although I do not identify ...
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A Theory of the Role of Medium of Exchange in Mergers and Acquisitions

A Theory of the Role of Medium of Exchange in Mergers and Acquisitions

Date: May 1994
Creator: Tiwari, Rajesh Kumar
Description: An acquisition bid is like any other proposal for risky investment. The difference arises due to additional source of risk arising from two different sources of information asymmetry due to private knowledge held by the bidder and target. We hypothesize that the bidding process evolves in a manner to optimize bidder's investment in the target through a process of joint signalling. Medium of exchange and bid premium are used as the two signal elements simultaneously by the bidder. We develop a multiple signalling model of the bidding process which is fully revealing in equilibrium.
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A Test of Allocational Market Efficiency in Takeovers Using Tobin's q Theory of Investment

A Test of Allocational Market Efficiency in Takeovers Using Tobin's q Theory of Investment

Date: May 1987
Creator: Kim, Keeho
Description: The primary purpose of the study was to investigate whether takeover markets are allocationally efficient using Tobin's q as the variable which summarizes the investment opportunities of firms. Chapter I presented the purposes, hypotheses, methodology, and limitations of the study. The two hypotheses proposed were as follows: Acquiring firms' q should be significantly higher than that of control firms, on average, and target firms' q should be significantly lower than that of control firms, on average. Chapter II presented the review of literature on takeovers and theory of investments. Chapter III presented the research design adopted to test the above hypotheses. The methodology to calculate q-values and methods to reduce the bias which may result from choice-based sampling were also given. A paired comparison t-test was employed to test the hypotheses. Sample firms were selected from the COMPUSTAT RESEARCH and COMPUSTAT INDUSTRIAL tape.
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