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Earnings Management Surrounding Takeover Rumours

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Earnings Management Surrounding Takeover Rumours

Zhang, Dan (2018) Earnings Management Surrounding Takeover Rumours. Masters thesis, Concordia University.

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Abstract

I investigate whether firms manage earnings in proximity to initially published rumours of their impending takeover. Utilizing a unique sample of 1,831 takeover rumours, I find that rumoured target firms inflate their earnings prior to the rumour's publication. Rumours which are more likely to be anticipated by the target firm (rumours initiated by targets, rumours concerning financial distress, and rumours concerning the hiring of a financial advisor) provide stronger associations with earnings management than do other rumour types. I interpret results as consistent with rumored target firms attempting to benefit from higher takeover valuations if takeover bids are indeed forthcoming

Divisions:Concordia University > John Molson School of Business > Finance
Item Type:Thesis (Masters)
Authors:Zhang, Dan
Institution:Concordia University
Degree Name:M. Sc.
Program:Finance
Date:8 January 2018
Thesis Supervisor(s):Davis, Frederick
Keywords:Earnings management; media coverage; mergers and acquisitions; rumours.
ID Code:983480
Deposited By: Dan Zhang
Deposited On:11 Jun 2018 03:48
Last Modified:11 Jun 2018 03:48
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