The results of these massive restructuring was analyzed basing on 77 firms in comparison with control cluster of firms who did not employ restructuring. In terms of corporate market transformation the analysis was based on the market reaction to the restructuring announcements aided by use of the conventional market model to estimate the cumulative abnormal returns.
Results of the market reaction were statistically significant and positive. Restructuring announcements significantly contributed to an increase in stock price before the announcement due to information leakage or/and market anticipation by about 8.13% (Zhenhu, 2009). While after 30 days results decline slightly because after announcement of restructuring, investor’s analysis may make them less optimistic about the prospects of the firms. However, it is evident that restructuring does lead to positive gain in terms of corporate market.
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