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Effects of corporate refocusing on UK listed industrial companies' valuations, reported earnings and financial analysts' earnings forecasts
Başlık:
Effects of corporate refocusing on UK listed industrial companies' valuations, reported earnings and financial analysts' earnings forecasts
Yazar:
Mak, Chun Yu, author.
ISBN:
9780355978117
Yazar Ek Girişi:
Fiziksel Tanımlama:
1 electronic resource (318 pages)
Genel Not:
Source: Dissertation Abstracts International, Volume: 76-08C.
Özet:
With the onset of economic recession in the UK in the early 1990s and under pressure from strong competition, takeover threats, corporate governance and changes in production technology, more firms undertook corporate refocusing activities. This phenomenon drew the attention of investors and analysts because the reasons and consequences associated with refocusing affect earnings forecasts and firm valuation. Managers' methods of accounting for restructuring charges are another important issue, of concern to the market and regulators. This study consists of an analysis of the market and accounting performance of refocusing firms along with an analysis of the accounting treatment of restracturing activities and an examination of analyst earnings forecasts around corporate refocusings. The research comprises four elements. First, I define corporate refocusing as a kind of asset restructuring, in which a firm cuts its unprofitable or unimportant business segments to refocus on the original core business or on a new core business. It can be undertaken in three ways: (i) downsizing, (ii) focusing on the original core business by using the proceeds from disposals of unprofitable business segments, and (iii) entering a new product market. Second, I examine 623 refocusing firms' market and accounting performance in the five years around their refocusing announcement dates. The results show that there are economically and statistically significant patterns of negative abnormal stock returns and operating performance in the pre-refocusing period. Third, I undertake a financial statement analysis of a subset of 60 refocusing firms to investigate how they account for refocusings and examine the relationship between all refocusing firms' earnings and stock returns. The results show that 85% of 60 refocusing firms recognise restructuring charges at once as extraordinary, exceptional or super-exceptional items in the year of announcing refocusing. Empirical results on the relation between earnings and stock returns show that Basu's conservatism effect holds in the year of announcing refocusing. Furthermore, the market to some degree anticipates refocusing announcements and that there is an element of delayed reaction to refocusing announcements. Finally, the results show that financial analysts are optimistic in deriving earnings forecasts for refocusing firms and that disagreement among their forecasts increases in the post-refocusing period.
Notlar:
School code: 1543
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Yer Numarası | Demirbaş Numarası | Shelf Location | Lokasyon / Statüsü / İade Tarihi |
---|---|---|---|
XX(683847.1) | 683847-1001 | Proquest E-Tez Koleksiyonu | Arıyor... |
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