Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
change the financing mix of an underlevered company than it is to modernize the plant and equipmentofamanufacturingcompanythatha ...
acquisitions rather than looking at all acquisitions. If the essenceofthevalueofcontrolisthatyoucanchangetheway a company is man ...
FIGURE 13.7Hostile versus Friendly Takeovers Source:Bhide (1989). Asyoucansee,targetfirmsinhostiletakeovershaveearneda 2.2 perce ...
Manyofthehostiletakeoverswere followedbyan increaseindebt,whichresultedinadowngradingof thedebt.Thedebtwasquicklyreducedwithpro ...
likelihoodthatthemanagementofthefirmwillbechanged and the value of making that change. Expectations and Stock Prices Toseehowthe ...
sophisticatedmodelstomaketheseassessments,theydotry to value and price in control. Implications Marketsarenot prescientorall-kno ...
Anything that causes market perception of the likelihoodofmanagementchangeto shiftcanhave largeeffects onall stocks.Ahostileacq ...
tolookateventsthatchangethatexpectedvalue.Wehave already pointed to three events that cause this to happen: hostile acquisitions ...
takeover intensity is high (measured by the number of mergersthattook placeinit)tradeathighermarketvalues relative to replacemen ...
Successor Is Insider Successor Is Outsider Forced CEO turnover Increase in likelihood of change but no immediate policy Most lik ...
the stock price, since companies with better corporate governancemaybebetterrunanddeliversuperioroperating results. In their stu ...
50 Finally,theyfindthatthestrengthofcorporategovernance matters more in countries with weak legal systems. In an interesting twi ...
themarket price and our valuesper share are correct, the market price can be written in terms of a probability of control changi ...
managementchanginginthisfirmisπ.Sincethenonvoting shareshaveabsolutelynosayinwhetherthemanagementcan be changed, the value per n ...
great deal of control over how the firm is run. Although goldensharesarenottraded, theywillaffect thevaluesof shares that are tr ...
higherthepremiumonvotingsharesshouldbe.Since the expected value of control is divided by the number of voting shares to get the ...
smallestinwell-managedfirmsandinfirmswherethevoting shares are concentrated in the hands of insiders and management. Empirical E ...
nonvotingstockholdersandlargerforcountrieswithoutsuch protection. 55 Someofthesestudiesmentionedalsohypothesize(andtest) forwhyv ...
thepremiumonvotingsharesandasubsequentreformofthe law in 1999 reversed both effects. 58 Insummary,thepremiumforvotingsharesrefle ...
59 and partly because the Brazilian government has significant influence in the company. 60 Assuming a probability of 20% that m ...
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