Sources of shareholders' wealth gains from asset sales
AbstractThis paper uses an event study approach to examine the performance improvements accruing to those UK firms making assets sales in a single divestiture. It is found that a divestiture announcement leads to an increase in shareholders' wealth of between 0.81% and 1.04% depending on the expected return model employed. The source of the wealth gain can be attributed to the relaxing of credit constraints achieved by reducing the level of debt.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Financial Economics.
Volume (Year): 15 (2005)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAFE20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shleifer, Andrei & Vishny, Robert W, 1992. " Liquidation Values and Debt Capacity: A Market Equilibrium Approach," Journal of Finance, American Finance Association, vol. 47(4), pages 1343-66, September.
- Afshar, K. A. & Taffler, R. J. & Sudarsanam, P. S., 1992. "The effect of corporate divestments on shareholder wealth: The UK experience," Journal of Banking & Finance, Elsevier, vol. 16(1), pages 115-135, February.
- John, Kose & Ofek, Eli, 1995. "Asset sales and increase in focus," Journal of Financial Economics, Elsevier, vol. 37(1), pages 105-126, January.
- Schlingemann, Frederik P. & Stulz, Rene M. & Walkling, Ralph A., 2002. "Divestitures and the liquidity of the market for corporate assets," Journal of Financial Economics, Elsevier, vol. 64(1), pages 117-144, April.
- Comment, Robert & Jarrell, Gregg A., 1995. "Corporate focus and stock returns," Journal of Financial Economics, Elsevier, vol. 37(1), pages 67-87, January.
- Enrico Tanuwidjaja, 2006. "Multi Factor SUR in Event Study Analysis: Evidence from M&A in Singapore’s Financial Industry," SCAPE Policy Research Working Paper Series 0607, National University of Singapore, Department of Economics, SCAPE.
- Enrico Tanuwidjaja, 2006. "Multi Factor SUR in Event Study Analysis : Evidence from M&A in SingaporeÃ¢â‚¬â„¢s Financial Industry," Finance Working Papers 22577, East Asian Bureau of Economic Research.
- Cao, Jack & Owen, Sian & Yawson, Alfred, 2008. "Analysing the wealth effects of UK divestitures: An examination of domestic and international sales," Research in International Business and Finance, Elsevier, vol. 22(1), pages 68-84, January.
- Enrico Tanuwidjaja, 2007. "Multi-factor SUR in event study analysis: evidence from M&A in Singapore's financial industry," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 3(1), pages 55-62, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.