This paper is part of the Merger Project being carried out at the International Institute of Management. The bulk of the project consists of studies of the determinants and…
Abstract
This paper is part of the Merger Project being carried out at the International Institute of Management. The bulk of the project consists of studies of the determinants and effects of mergers in seven countries. Since most of the mergers in Europe are between firms in the same industry, or vertically connected, the other studies which are part of the Merger Project do not focus on the conglomerate merger per se. The conglomerate merger, a merger between firms in unrelated industries, has been a major form of merger only in the United States so far.
The purpose of this study is to determine if an earnings forecasting model based on factors hypothesised to result in differential profits across firms (industries) reduces model…
Abstract
The purpose of this study is to determine if an earnings forecasting model based on factors hypothesised to result in differential profits across firms (industries) reduces model error relative to the model developed by Ou (1990). Initial research attempting to forecast earnings found that the random walk model, where current year's earnings are the prediction for next year, provides the best forecast of annual earnings (Ball and Watts 1972; Foster 1973; Beaver, Kettler, and Scholes 1970; Albrecht, Lookabill, and McKeown 1977; Brealey 1969). Ou (1990) developed an earnings forecasting model using financial statement information beyond prior years' earnings as the explanatory variables that outperformed the random walk model in predicting annual earnings.
In the last four years, since Volume I of this Bibliography first appeared, there has been an explosion of literature in all the main functional areas of business. This wealth of…
Abstract
In the last four years, since Volume I of this Bibliography first appeared, there has been an explosion of literature in all the main functional areas of business. This wealth of material poses problems for the researcher in management studies — and, of course, for the librarian: uncovering what has been written in any one area is not an easy task. This volume aims to help the librarian and the researcher overcome some of the immediate problems of identification of material. It is an annotated bibliography of management, drawing on the wide variety of literature produced by MCB University Press. Over the last four years, MCB University Press has produced an extensive range of books and serial publications covering most of the established and many of the developing areas of management. This volume, in conjunction with Volume I, provides a guide to all the material published so far.
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The preceeding article has examined some of the motivations behind the high premiums offered shareholders of target firms in acquisitions and mergers. In essence, the acquirers…
Abstract
The preceeding article has examined some of the motivations behind the high premiums offered shareholders of target firms in acquisitions and mergers. In essence, the acquirers appear to be looking for gains largely through enhanced efficiency of operations or by the replacement of inefficient management.
Subhash C. Sharma and Ike Mathur
Merger activities and stock market prices tend to vary over time. An interesting issue is whether changes in stock market prices stimulate changes in merger activities, or vice…
Abstract
Merger activities and stock market prices tend to vary over time. An interesting issue is whether changes in stock market prices stimulate changes in merger activities, or vice versa. The results of this study, based on the Granger test for causality, indicate very strong causality going from stock market prices to merger activities. Increases in stock market prices, perhaps indicating a favourable economic environment, lead to increases in the number of mergers being completed.
I. Keong Chew, Keith H. Johnson and M. Andrew Fields
Regardless of their motives, acquiring firms almost always have to offer a premium to the shareholders of the acquired firm in acquisitions. That is, the value of the securities…
Abstract
Regardless of their motives, acquiring firms almost always have to offer a premium to the shareholders of the acquired firm in acquisitions. That is, the value of the securities or cash paid by the acquirers is higher than the premerger market price of the acquired firm's common stock. The size of the merger premiums, as a percentage of the pre‐merger market price of the acquired firm's common stock, could vary from 20 per cent to 115 per cent. Several empirical studies examining the factors that determine the size of merger premiums have had limited success. Since the merger premium could affect the probability of success of a merger attempt and the wealth of the shareholders of both the acquiring and the acquired firms, continued efforts to improve our understanding of merger premium determination is essential. This paper investigates empirically the premiums paid in 66 mergers consummated between 1975 and 1979.
Contrary to the conventional wisdom, it's not fluctuations in the stock market that have put the American economy in jeopardy. It's the fact that American firms persist in…
Abstract
Contrary to the conventional wisdom, it's not fluctuations in the stock market that have put the American economy in jeopardy. It's the fact that American firms persist in pursuing short‐term profits and high stock prices.
Strategic investment theory establishes a framework for discussing the benefits of acquisitions. However, these theories do not provide automatic answers to investment questions.