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- W2197727493 abstract "The relative economic efficiency of acquisitions as a means of restructuring financially distressed firms is investigated. Yearly accounting and daily stock price data are extracted for the period between 1979 and 1998 on firms entering financial distress The behaviour and performance of these firms were traced for a five year period following their entry into distress or until their shares were no longer trading. These collected data forms the basis for analyzing the returns acquired from investing in potential takeover targets. Survival analysis is used to analyze the hazard rate for both the acquisition and bankruptcy of distressed firms. The results of the analysis indicate that the ZSCORE, a predictor of the probability of failure, and SPCSRM, the rating by Standard and Poor’s, can be used as financial indicators in the screening mechanisms for financially distressed firms. A multinomial-logit acquisition model is used to predict three outcomes of financially distressed firms: survival, acquisition and failure. This model is tested using two methods by simulating the probability of acquisition. The first uses to compare the predicted versus the actual corporate events to maximize the predicted acquisition event. The second uses to compute abnormal return to maximize portfolio return over a given time period, continual on the ZSCORE, probability of acquisition, and the length of holding period. The predictive model of the acquisition probability is applied as a stock entry rule in a buy-sell system. The success of the model will serve two purposes. One is to predict the economic value of acquisition. The other is to provide successful strategies for investing in stocks." @default.
- W2197727493 created "2016-06-24" @default.
- W2197727493 creator A5060002817 @default.
- W2197727493 date "2003-01-01" @default.
- W2197727493 modified "2023-09-27" @default.
- W2197727493 title "Analyzing an acquisition model and optimizing stock abnormal return using simulation techniques" @default.
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