1,721,011 research outputs found
Distressed M&A and the role of M&A in corporate restructuring
No full textThe global financial and economic crisis have led to a moderation in global M&A activity. The large M&A deals have disappeared and deal volume has fallen. Nonetheless, M&A remains a core part of business growth. Firms continue to look for acquisitions that allow them to capture a new customer base, technologies and products, access new markets and increase market share. While some years ago the M&A market was characterized by growing firms with a healthy track record, transactions involving distressed firms are increasing. Many investors, managers, advisors and academics are familiar with traditional mergers and acquisitions but little is known about distress-related M&A. However the surge in restructurings and failures has marked the M&A landscape and triggered a growing interest in these type of transactions. The practitioner-oriented and academic literature provide us with some insights but the risks and benefits of such transactions remain largely ambiguous. The goal of this dissertation is to increase our understanding of transactions involving troubled firms
Value and marketability : determinants of the discount for lack of marketability
No full textThe valuation of private companies is a matter of interest for many stakeholders, including valuation professionals, auditors, courts, and tax authorities. The matter is deceptively complex, notably because there is no consensus on the nature, size, and determinants of the so-called discount for lack of marketability (DLOM).
The DLOM can be defined as an amount or percentage deducted from the value of an ownership interest to reflect the relative absence of marketability. Indeed, most valuation methods lead to value indications for a marketable interest, and it is generally accepted that investors attach a lower price to assets that are not readily marketable.
The DLOM is oftentimes oversimplified as the difference in value between an illiquid (unlisted) stock and an all-else-equal liquid (listed) security. This value gap is important but ill understood. Leading scholars have noted time and time again that fair market value calculations often boil down to taking a marketable value estimate and reducing that amount by a contrived percentage. In practice, DLOMs of 20% to 40% are routinely used for valuing private businesses.
The extant literature has proposed various DLOM estimation methods that fall into two broad categories: theoretical and empirical models. All of these models have been challenged, either because they require the input of information that cannot be objectively determined for private companies (theoretical models), or because estimates based on the comparisons between liquid and illiquid valuation subjects are by nature always imperfect and thus prone to discussion (empirical models).
Nevertheless, and in the absence of better information, the empirical models, especially, have received lots of attention and the averages presented in these studies are often used in practice without much formal reasoning or economic justification.
In order to shed more light on the determinants of the DLOM we have turned to an alternative source of information that can bring additional insights. Specifically, we have turned to court decisions that decide on private company valuations, including the DLOM to be applied. The court typically justifies its decision by referring to how the specific company is situated, and the rights and obligations attached to the valuation subject. This contextual information provides more background than the pure financial information that can be found in traditional data sources.
This method which combines elements of qualitative and quantitative analysis has allowed us to demonstrate that the company’s ownership structure, its operations, the transfer restrictions on shares, the exit possibilities for shareholders, and the level of control attached to the valuation subject have a significant impact on the DLOM
How Dell's excellent working capital management results in outstanding financial performance
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Going Beyond Counting First Authors in Author Co-citation Analysis
Get PDFThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
Variations on the Author
Get PDF“Variations on the Author” discusses two of Eduardo Coutinho’s recent films (Um Dia na Vida, from 2010, and Últimas Conversas, posthumously released in 2015) and their contribution to the general question of documentary authorship. The director’s filmography is characterized by a consistent yet self-effacing form of authorial self-inscription: Coutinho often features as an interviewer that rather than express opinions propels discourses; an interviewer that is good at listening. This mode of self-inscription characterizes him as an author who is not expressive but who is nonetheless markedly present on the screen. In Um Dia na Vida, however, Coutinho is completely absent form the image, while Últimas Conversas, on the contrary, includes a confessional prologue that moves the director from the margins to the center of his films. This article examines the ways in which these works stand out in the filmography of a director who offers new insights into the notion of cinematic authorship
The Performance of Acquisitions by High Default Risk Bidders
Get PDFWe investigate the takeover strategies of high default risk acquirers and their value impact. We find that these bidders select bigger, less profitable and unrelated targets, pursue transactions during recessions, and pay with shares by offering target shareholders high premiums. Their long-term buy-and-hold returns are extremely negative, and reflect fundamentally their substantial drop in profitability combined with high leverage. We show that the well-established long-run underperformance of acquiring firms is largely driven by this sub-set of acquirers. The results are similar when we use alternative measures of default risk and performance, and a global sample of non-US bidders
Analyzing the financial statements of the world's largest retailer: Wal-Mart
No full textThis case is intended for an introductory or main course on Financial Statement Analysis. It may also be useful within a Corporate Finance / Financial Management course. After a class on financial statements and liquidity, profitability and solvency ratios - and some brief examples discussed by the lecturer - students should be capable of making a financial analysis of Wal-Mart. Students can be asked to make this analysis in class, or to prepare the case outside the classroom, and to present it. Ideally, the case work is conducted in groups of 4 to 6 students, and it typically takes between 1 to 1.5 hours (for the analysis itself - obviously, drafting a written report or presentation is more time consuming). The Wal-Mart case is aimed at both undergraduate and graduate students, and for general management programmes / MBAs as well as finance students - obviously, for the latter group, a much more fine-grained analysis, extensive discussion and adequate linking among various financials and between the numbers and Wal-Mart's business is required. Evidently, the lecturer should highlight many more details in a class of finance students
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