The Empirical Study of Corporate Value DecompositionModel of Taiwan’s Target and Acquirer Firms

• Main Authors: Ying-Chi Chen, 陳盈棋
• Other Authors: 古永嘉
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/51692611666482621171

博士 === 國立臺北大學 === 企業管理學系 === 99 === To test valuation errors affect merger activity, we base on 115 published merger companys from year 1997 to 2009 and refer to Rhodes-Kropf and Viswanathan (2005); Shleifer and Vishny (2005) develop a decomposition that breaks the market-to-book ratio (M/B) into three components: the firm-specific pricing deviation from short-run industry pricing; sector-wide, short-run deviations from firms’ long-run pricing; and long-run pricing to book. We find strong support for recent theories by which predict that misvaluation drives mergers. So much of the behavior of M/B is driven by firm-specific deviations from short-run industry pricing, that long-run components of M/B run counter to the conventional wisdom: Low long-run value to book firms buy high long-run value-to-book firms. Misvaluation affects who buys whom, as well as method of paymen to explain aggregate merger activity.