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STRUCTURAL CHANGES IN RETURN‐GENERATING MODELS AROUND TENDER OFFERS: A NOTE
Author(s) -
Ely David P.,
Song Moon H.
Publication year - 1994
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1994.tb00321.x
Subject(s) - bidding , tender offer , econometrics , economics , abnormal return , rate of return , financial economics , microeconomics , business , finance , corporate governance , stock exchange , shareholder
This note investigates the role of changes in the parameters of return‐generating models in explaining the pattern of abnormal returns accruing to target and bidding firms around tender‐offer announcements. Employing a varyingparameter modeling approach the study finds lower abnormal returns to target firms and increased abnormal returns to bidding firms, relative to standard approaches. However, use of this approach fails to refute the common findings that mean abnormal returns are large for target firms and negligible for bidding firms.