Shareholder Wealth Creation in Response to Announcements of Acquisitions of Unlisted Firms: Evidence from Spain

2012 ◽  
Author(s):  
José Emilio Farinós Viñas ◽  
Begoña Herrero Piqueras ◽  
Miguel Angel Latorre Guillem
Keyword(s):  
Shareholder Wealth ◽  
Wealth Creation ◽  
Unlisted Firms

Impact of Capital Structure on Shareholder Value in Indian Pharmaceutical Industry: An Empirical Approach Through Created Shareholder Value

2018 ◽  
Vol 19 (5) ◽  
pp. 1290-1302 ◽  
Author(s):  
Merugu Venugopal ◽  
Bhanu Prakash Sharma G. ◽  
Ravindar Reddy M.
Keyword(s):  
Capital Structure ◽  
Shareholder Value ◽  
Economic Value ◽  
Value Added ◽  
Shareholder Wealth ◽  
Vital Role ◽  
Debt Ratio ◽  
Wealth Creation ◽  
Financing Decisions ◽  
The Right

Enhancing shareholder value is one of the primary goals along with the profitability in the competitive world. Top-level management is striving for creating the higher shareholder value by making efficient decisions. Shareholder value as the key objective of the firm and measures such as economic value added, market value added, shareholder value added and created shareholder value (CSV) have gained popularity in measuring the shareholder wealth creation. Among various financing decisions, capital structure decision plays a vital role, that is, mix of debt and equity. Considering the optimal capital structure with the right balance between equity and debt is always a challenge for the financial managers, and also to run the business successfully by gaining higher profits and enhancing shareholder value. An attempt has been made to analyse the capital structure impact on shareholder value by considering CSV as a shareholder value measure in 77 Indian pharmaceutical firms listed in BSE over a period of 9 years from 2007 to 2015. Using the balanced panel data and regression models, we found that determinants such as debt–equity ratio, long-term debt ratio and short-term debt ratios have positive correlation with CSV and negatively related to total debt ratio in the absence of tax.

scholarly journals The impact of divestitures on shareholder wealth – The DACH case

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nils Teschner ◽  
Herbert Paul
Keyword(s):  
Positive Impact ◽  
Relative Size ◽  
Abnormal Returns ◽  
Shareholder Wealth ◽  
Wealth Effects ◽  
Wealth Creation ◽  
Publicly Traded ◽  
Content Type ◽  
Publicly Traded Companies ◽  
The Impact

PurposeThe purpose of this research is to study the impact of divestitures on shareholder wealth. This study covers selloffs of publicly traded companies in Germany, Austria and Switzerland (DACH region) during the period 2002–2018. It aims to understand the overall effect of selloffs on shareholder wealth as well as the impact of important influencing factors.Design/methodology/approachThis study is part of capital market studies which investigate shareholder wealth effects (abnormal returns) using event study methodology. To determine the significance of abnormal returns, a standardized cross-sectional test as suggested by Boehmer et al. (1991) was applied. The sample consists of 393 selloffs of publicly traded companies with a deal value of at least EUR 10m.FindingsThe findings confirm the overall positive impact of selloffs on shareholder wealth. The average abnormal return on the announcement day of the sample companies amounts to 1.33%. The type of buyer, the relative size of the transaction as well as the financial situation of the seller in particular seem to influence abnormal returns positively.Originality/valueThis study investigates shareholder wealth creation through selloffs in the DACH region, a largely neglected region in divestiture research, but now very relevant due to increasing pressure of active foreign investors. Sophisticated statistical methods were used to generate robust findings, which are in line with the results of similar studies for the US and the UK.

Shareholder wealth creation following M&A: evidence from European utility sectors

2013 ◽  
Vol 23 (10) ◽  
pp. 891-900 ◽  
Author(s):  
Sanjukta Datta ◽  
Devendra Kodwani ◽  
Howard Viney
Keyword(s):  
Shareholder Wealth ◽  
Wealth Creation

scholarly journals Corporate social responsibility: the financial impact of black economic empowerment transactions in South Africa

2011 ◽  
Vol 12 (2) ◽  
pp. 180-193 ◽  
Author(s):  
Hendrik Wolmarans ◽  
Kurt Sartorius
Keyword(s):  
South Africa ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Listed Companies ◽  
Shareholder Wealth ◽  
Economic Empowerment ◽  
Wealth Creation ◽  
Black Economic ◽  
Black Economic Empowerment ◽  
Corporate Social

Corporate social responsibility (CSR) has recently received considerable attention in literature. One of the vehicles by which companies can conform to CSR in South Africa is Black Economic Empowerment (BEE). In this regard, BEE has been employed to assist previously disadvantaged groups of investors obtain a larger share of the equity of South African listed companies. The question has often been asked whether the announcement of BEE transactions by listed companies increases shareholder wealth. This article tries to answer this question by examining the share performance of 125 BEE transactions involving 95 companies during the period January 2002 to July 2006. The results indicate a positive relation between BEE transaction announcements and shareholder wealth creation, but only during the last part of the period covered by the study.

scholarly journals Value Creation, Appropriation, and Distribution: How Firms Contribute to Societal Economic Inequality

2018 ◽  
Vol 57 (6) ◽  
pp. 983-1009 ◽  
Author(s):  
Hari Bapuji ◽  
Bryan W. Husted ◽  
Jane Lu ◽  
Raza Mir
Keyword(s):  
Value Creation ◽  
Economic Inequality ◽  
Shareholder Wealth ◽  
Value Distribution ◽  
Business And Society ◽  
Wealth Creation ◽  
Value Appropriation ◽  
Wealth Maximization ◽  
Top Executives ◽  
Shareholder Wealth Maximization

Firms are central to wealth creation and distribution, but their role in economic inequality in a society remains poorly studied. In this essay, we define and distinguish value distribution from value creation and value appropriation. We identify four value distribution mechanisms that firms engage in and argue that shareholder wealth maximization approach skews the value distribution toward shareholders and top executives, which in turn contributes to rising economic inequalities around the world. We call on organizational scholars to study the value distribution role of firms and its consequences for society, and introduce the articles in this volume of the special issue on economic inequality, business, and society.

scholarly journals The role of dividend policy in share price volatility

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Lydia Pelcher
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Wealth Distribution ◽  
Price Volatility ◽  
Shareholder Wealth ◽  
Share Price ◽  
Wealth Creation ◽  
Top 40 ◽  
A Company

Orientation: A key objective of a company is to maximise shareholder wealth. Distribution of created wealth is achieved either through reinvestment in the company, which increases share value, or through dividend payouts. This encapsulates the dividend policy of a company. In order to realise a cash return, the former requires an investor to liquidate part of the investment, while the latter provides an immediate cash return.Research purpose: The objective was to establish whether relationships exist between share price volatility and dividend policy for shares listed on the Johannesburg Stock Exchange Limited (JSE).Motivation for the study: Dividend policy is an important consideration in the wealth creation process, particularly whether or not to distribute dividends to shareholders. Dividend policy is often structured to cater for shareholders’ expectations.Research design, approach and method: Panel data analysis was employed on a sample of the top 40 JSE-listed shares from 2007 to 2016.Main findings: The results indicated that the association between share price volatility and dividend yield is positive and significant but that between share price volatility and payout ratio is insignificant.Practical/managerial implications: Dividends were proven to be relevant to shareholders and have an association with share price volatility.Contribution/value-add: Dividend policy for the top 40 companies listed on the JSE is a contributor to share price volatility. In order to minimise share price volatility, managers of dividend-paying companies should structure the dividend policy to have consistent dividend payments but also able to reinvest excess cash within the company.

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