Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Control can be maintained over firms with a variety of corporatestructuresincludingpyramidsandcrossholdings.In apyramidstructure ...
investedinthefirm,maynotbegoodfortheotherinvestors in the firm. WhatMayCausetheLikelihoodofManagementChangingto Shift? Ifthere i ...
23 Whileithastakenalittlelongerintherestofthe world, activist investors are now part of the investment landscape in more and mor ...
acquisitionstendedtotradeatlowerprice-to-bookratiosthan otherfirms,andWeir(1997)addedtothisfindingbynoting that target firms in ...
33 Ownershipstructure.ForcedCEOchangesaremore commonincompanieswithhighinstitutionalandlow insider holdings. 34 Theyalsoseemtoo ...
Whileanymergercanhaveacomponentofitsvaluederived fromcontrol,hostileacquisitionsoffertheclearestexampleof controlpremiumsatwork, ...
Ifthevalueofcontrolisthedifferencebetweenthestatusquo valueofafirmandthevalueofthefirmoptimallyrun,we can derive the following i ...
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 ...
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