TY - JOUR
T1 - An empirical analysis of the stockholder-bondholder conflict in corporate spin-offs
AU - Veld, Christianus Henricus
AU - Veld-Merkoulova, Joulia Wiktorowna
PY - 2008
Y1 - 2008
N2 - We analyze the effect of daily stock and bond abnormal returns around spin-off announcements. Over a three-day event window, we find statistically significant abnormal returns of 3.07 for stocks and 0.11 for straight bonds. Both stock and bond abnormal returns are higher for firms with lower interest and dividend payouts. Stock abnormal returns are also higher for firms with higher pre-spin-off leverage. Overall, we find that the firm value increase compensates for the wealth transfer effect and that bondholders wealth is not reduced as a result of spin-off.
AB - We analyze the effect of daily stock and bond abnormal returns around spin-off announcements. Over a three-day event window, we find statistically significant abnormal returns of 3.07 for stocks and 0.11 for straight bonds. Both stock and bond abnormal returns are higher for firms with lower interest and dividend payouts. Stock abnormal returns are also higher for firms with higher pre-spin-off leverage. Overall, we find that the firm value increase compensates for the wealth transfer effect and that bondholders wealth is not reduced as a result of spin-off.
UR - https://www.scopus.com/pages/publications/70350173726
U2 - 10.1111/j.1755-053X.2008.00006.x
DO - 10.1111/j.1755-053X.2008.00006.x
M3 - Article
SN - 0046-3892
VL - 37
SP - 103
EP - 124
JO - Financial Management
JF - Financial Management
IS - 1
ER -