Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The M&A Short-Term Wealth Effect of A Consistent Dividend-Paying Firm
Dublin Core
Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The M&A Short-Term Wealth Effect of A Consistent Dividend-Paying Firm
The M&A Short-Term Wealth Effect of A Consistent Dividend-Paying Firm
Subject
ARDL model; asymmetric effect; bank lending; bank performance; bank soundness
Description
The paper examines the M&A short-term wealth effect of a consistent dividend-paying firm. The consistent dividend-paying firm is unique because they are associated with lower agency problems. Hence, it is expected that the M&A by the dividend-paying firm has a short-term positive wealth effect. To test the hypothesis, we perform two steps analysis. The event-study method examines the acquirer stock performance on the announcement
date, the deal close date, and the announcement to deal close date. The cross-section regression to test the short-term wealth effect of M&A by the dividend-paying firm. The dependent variable is the acquirer's stock performance from the event-study method. The independent variable is a dividend-paying firm. The control variables are the acquisition deal value relative to the acquirer's stock market capitalization, the acquirer's stock
dividend yield, and the acquirer's price-to-book value (PBV) ratio. The samples are M&A transactions in ASEAN-5 (Indonesia, Malaysia, The Philippines, Thailand, and Vietnam) for 2015-2019. The regression analysis shows that the variable representing a dividendpaying firm has a negative sign. The finding suggests that investors react negatively to the M&A by the dividend-paying firm. The negative wealth effect is relatively small compared to the M&A deal value and the acquirer's stock valuation. The result is that the M&A by a
dividend-paying firm provides a short-term positive wealth effect.
date, the deal close date, and the announcement to deal close date. The cross-section regression to test the short-term wealth effect of M&A by the dividend-paying firm. The dependent variable is the acquirer's stock performance from the event-study method. The independent variable is a dividend-paying firm. The control variables are the acquisition deal value relative to the acquirer's stock market capitalization, the acquirer's stock
dividend yield, and the acquirer's price-to-book value (PBV) ratio. The samples are M&A transactions in ASEAN-5 (Indonesia, Malaysia, The Philippines, Thailand, and Vietnam) for 2015-2019. The regression analysis shows that the variable representing a dividendpaying firm has a negative sign. The finding suggests that investors react negatively to the M&A by the dividend-paying firm. The negative wealth effect is relatively small compared to the M&A deal value and the acquirer's stock valuation. The result is that the M&A by a
dividend-paying firm provides a short-term positive wealth effect.
Creator
Veeghan Frances Tirtasaputra, Veren Geby Salim, John Iwan Kusno, Adrian Teja
Source
DOI: 10.26905/jkdp.v26i2.6572
Publisher
Universitas Merdeka Malang
Date
April 2022
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Files
Collection
Citation
Veeghan Frances Tirtasaputra, Veren Geby Salim, John Iwan Kusno, Adrian Teja, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The M&A Short-Term Wealth Effect of A Consistent Dividend-Paying Firm,” Repository Horizon University Indonesia, accessed December 22, 2024, https://repository.horizon.ac.id/items/show/4837.
The M&A Short-Term Wealth Effect of A Consistent Dividend-Paying Firm,” Repository Horizon University Indonesia, accessed December 22, 2024, https://repository.horizon.ac.id/items/show/4837.