The Journal of Finance publishes leading research across all the major fields of finance. It is one of the most widely cited journals in academic finance, and in all of economics. Each of the six issues per year reaches over 8,000 academics, finance professionals, libraries, and government and financial institutions around the world. The journal is the official publication of The American Finance Association, the premier academic organization devoted to the study and promotion of knowledge about financial economics.
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Additional Evidence on the Relation Between Divestiture Announcements and Shareholder Wealth
Published: 12/01/1984 | DOI: 10.1111/j.1540-6261.1984.tb04916.x
JAMES D. ROSENFELD
This paper presents estimates of the effect of voluntary divestiture announcements on shareholder wealth. The results show that both spin‐off and sell‐off announcements tend to have a positive influence on the stock prices of the divesting firms, and that the spin‐offs “outperform” the sell‐offs on the day of the event. We also find that the economic gains to the shareholders of the selling and acquiring firms are nearly identical, suggesting that the sell‐off decision is perceived by both investor groups as a positive net present value (NPV) transaction.
The Effect of Voluntary Spin‐off Announcements on Shareholder Wealth
Published: 12/01/1983 | DOI: 10.1111/j.1540-6261.1983.tb03843.x
JAMES A. MILES, JAMES D. ROSENFELD
This paper presents estimates of the effect of a voluntary spin‐off announcement on shareholder wealth. The results show that spin‐off announcements have a positive influence on stock prices and that the relative increase in share price is greater for large spin‐offs than for small ones.