Sources of Hidden Value and Risk Within Tracking Stock
Tracking stock for a unit of a firm presumably allows the market to value and monitor that unit independently of the rest of the firm.Announcement of the creation of tracking stock elicits an abnormal share price response of 2.17%on average over a two-day period.The share price response at the time of the announcement is more favorable:when the voting rights of the tracking stock are based on a market valuation;when the parent company ’s debt ratio is relatively low;when the parent ’s previous stock performance is relatively poor; and when the parent is not engaging in an acquisition.These results are consistent with reduction of agency problems.At the same time,firms that create tracking stock do not experience higher long-term valuations,suggesting that agency problems are not resolved with the creation of tracking stock.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 31 (2002)
Issue (Month): 3 (Fall)
|Contact details of provider:|| Postal: University of South Florida 4202 E. Fowler Ave. COBA #3331 Tampa, FL 33620|
Web page: http://www.fma.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fma:fmanag:harper02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Courtney Connors)The email address of this maintainer does not seem to be valid anymore. Please ask Courtney Connors to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.