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REINCORPORATION: MOTIVES AND SHAREHOLDER WEALTH
Author(s) -
Peterson Pamela P.
Publication year - 1988
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1988.tb00782.x
Subject(s) - shareholder , wealth effect , offset (computer science) , monetary economics , business , set (abstract data type) , state (computer science) , economics , accounting , finance , corporate governance , monetary policy , algorithm , computer science , programming language
This study provides evidence on the wealth effects of reincorporation and the association of these wealth effects with motives to change the state of incorporation. There are no wealth effects observed on the announcement of the change for shareholders of corporations that change as part of a set of measures to defend against a pending or possible hostile takeover. However, for corporations that reincorporate without stated antitakeover intentions, a positive reaction is observed at the announcement of the change. These results indicate that the defensive posture assumed by reincorporating may offset other positive effects of the change in corporate charters.