Ex ante variables and carve‐out parent returns
Tóm tắt
The purpose of this paper is to provide a comprehensive initial evaluation of the changing issuer objective and partial price adjustment hypotheses as applied to carve‐out parent initial and three‐year returns for the period 1988‐2006.
Using five primary variables: the percentage of the subsidiary retained by the parent, the ratio of offering size to parent market capitalization, filing range adjustments, the percentage of the offering used to retire subsidiary debt or to pay dividends, and the CBOE volatility index to predict initial and three‐year returns, the paper shows that
The paper shows that public information known prior to the offer date influences 7.52 percent of the variation in announcement, 5.57‐38.31 percent of the variation in ex‐date and 6 percent of the variation in three‐year market‐adjusted equity carve‐out parent returns.
This study makes several contributions to the literature. Although prior studies focus on
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