Prediction Model of Post-merger Performance

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This study develops a comprehensive model describing the post-merger performance of a combined firm based on a fundamental ROE equation. The model suggests that post-merger performance is an exponential function composed of relative size, price to book ratio, synergy, cost of equity and book value change, rather than a simple linear combination of factors. In addition, the model addresses relative size effect, market valuation effect, premium, and merger wave, which are consistent with previous studies. Empirical tests are also provided to show the effectiveness of the model for measurement of the post-merger performance.
Publisher
한국금융학회
Issue Date
2008-12
Language
Korean
Citation

금융연구, v.22, no.4, pp.57 - 80

ISSN
1225-9489
URI
http://hdl.handle.net/10203/87260
Appears in Collection
MG-Journal Papers(저널논문)
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