Title: | How does market react to corporate spin-offs in Australia? |
Author(s): | Nguyen Xuan Truong |
Keywords: | Spin-offs; Price reactions |
Abstract: | While numerous studies on spin-off have been done in the US and Europe, little efforts have been directed to research this area of cor-porate finance in Australia. This study investigates how market re-acts to corporate spin-offs in this country. We employ traditional event study methodology and find that market reacts strongly and positively to the announcements of spin-offs. Specifically, the cu-mulative average abnormal return over the 3-day event window is 3.58%. The cumulative average abnormal return for spin-offs by companies that increase their industrial focus is 4.12% and 3.33% for non-focused increasing spin-offs. Nevertheless, the difference between these two subgroups is statistically insignificant. Multivari-ate regressions provide evidence that high pre-leverage firms benefit more from spin-offs. |
Issue Date: | 2017 |
Publisher: | Trường Đại học Kinh tế Tp. Hồ Chí Minh |
Series/Report no.: | JED, Vol.24(1) |
URI: | http://digital.lib.ueh.edu.vn/handle/UEH/55203 http://jabes.ueh.edu.vn/Home/SearchArticle?article_Id=b293a630-7d92-469a-afbc-ff8cee2c7f1c |
DOI: | http://doi.org/10.24311/jed/2017.24.1.07 |
ISSN: | 1859 -1124 |
Appears in Collections: | JABES in English
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