19.07.2021 | History

2 edition of Acquisition announcement and stock price behaviour found in the catalog.

Acquisition announcement and stock price behaviour

the Malaysia experience : working paper no. 15

  • 395 Want to read
  • 1454 Currently reading

Published by Administrator in University College Dublin

    Places:
  • United States
    • Subjects:
    • University College Dublin


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      • Includes bibliography.

        StatementUniversity College Dublin
        PublishersUniversity College Dublin
        Classifications
        LC Classificationsnodata
        The Physical Object
        Paginationxvi, 50 p. :
        Number of Pages64
        ID Numbers
        ISBN 10nodata
        Series
        1
        2Working papers series -- no. 15
        3

        nodata File Size: 7MB.


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Acquisition announcement and stock price behaviour by University College Dublin Download PDF EPUB FB2


37 — a full point below the merger value. These studies show that the stock of the acquiring company usually goes down immediately following an acquisition announcement, while the stock of the target company, or company being acquired, tends to go up. The methodology is well established in finance studies, but has not been applied to the shipping industry. The author has explained the issue in a lucid manner for the benefits of common investors.

3998 per share in value for their stock at closing. This potential for negative outcomes is known as. The higher the premium, the more the acquiring company expects to benefit from the deal. But, the case of merger happens between two firms of almost equal size. If you decide to test a strategy like this it would be a good idea to start with paper trading.

What Happens to Stock Prices After Acquisition?

The other reason for coming together of different companies is to create a combined entity that will be bigger than the sum total of both the entities. Therefore, this finding is inconsistent with the efficient market hypothesis in its Weak form. For a taste of just how volatile a reaction the markets can have to unexpected commentary, take a look at the graphic below.