StudentShare solutions
Triangle menu

Are premiums paid for takeovers overvalued before and after the financial crisis in Greek banking industry - Dissertation Example

Nobody downloaded yet

Extract of sample
Are premiums paid for takeovers overvalued before and after the financial crisis in Greek banking industry

However, it is important part of the dissertation because it makes significant contribution in backing the researcher’s point of view while providing current knowledge including substantive findings in terms of theoretical and methodological contribution. It reviews the books, journal articles and magazines to give new interpretations to old sources. In the article written by Li and Xu (2002), it is stated that higher- risk assets gives higher returns in comparison to low risk assets like treasury bills (see table1 below). It forms a basis in decision of asset allocation and making an estimation of interest rates in financial markets (Haitao Li and Yuewu Xu, 2002). During the process of bidding demand for firm’s products and its value influence the financial premium of the firm. It is so because there is direct correlation between net expected value and performance of the firm as it yields higher returns. This implies that the higher the value of the firm the higher premiums. Barberis, et al, (2001) held the view that higher volatility is recorded in the stock prices of a company when performance if its assets is not up to the standard. The entire banking industry came under pressure due to credit turmoil and subsequent deterioration of global market which in turn prompted intervention of the central banks particularly the IMF and the World Bank. This sector was adversely affected by the inherent weakness of the Greek economy that is a result of rising debt and deficits. However, improvements have been noticed in the premiums paid because of the strong legal framework and improvements to the operational model. A similar report finds that, as a way of increasing the economies of scale, merger and acquisitions was imminent. Risk in the assets can be reduced by diversification of the assets. It also brings profitability and promotes growth besides improving the survival rate in similar future financial crises. According to Nenova (2006) desire of having effective control over the firm and then pressurise the shareholders to sell the firm at lower price is the reason why banks overvalue premium during the process of mergers and acquisitions. In addition to this, value of the premium is also influenced by enforceability of ownership rights and confidence in the target banks ( LaPorta et al., 1998; Djankov et al., 2008 ; Nenova,2006; Bris and Cabolis,2008). As provided, the weaker the shareholder protection creates get-out for managers, shareholders to seize smaller, and minority shareholders with motives of gaining higher private benefits (Dyck and Zingales, 2004). A research study conducted by Hunter and Wall (1995) stated that acquirers are interested to pay more premiums for the banks that adopt strategies such as diversification for reducing combined firm’s overall risk and for the banks that would increase the value of the government safety net to the combined firm. With the help of regression analysis, it can be understood that a target with high variance of own profitability and high covariance with the acquirer’s profitability will yield less premium. Theory of diversification will also make similar implication. MANNER OF PREMIUMS COMPUTATIONS: a) An Informal Model of Bank Takeover Pricing During the process of valuation of a bank for merger and acquisition, several factors are considered by the bidder. First factor can be related with the present performance of the bank such as current profitability, the probability of growth based on the recent experience ...Show more

Summary

Are premiums paid for takeovers overvalued before and after the financial crisis in Greek banking industry? Literature Review Literature review is vital part of the dissertation as it provides crucial views of the prominent researchers and scholars in the respective area…
Author : linwood45
Are premiums paid for takeovers overvalued before and after the financial crisis in Greek banking industry essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the dissertation on your topic
"Are premiums paid for takeovers overvalued before and after the financial crisis in Greek banking industry"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Indian banking industry
The research study analyses the evolution and how the industry has improved and changed because of IT. Changes in IT have influenced the banking industry of India as it has offered convenience to make transactions. Consumers have also welcomed the changes that have occurred over the period of time as the volume of transaction have increased over the years
18 pages (4500 words) Dissertation
Economy situation in Poland before and after EU funding
These transformations have been attributed to reinventions of both political and economic forms. Over the years, the Poles have been discussing on the appropriate form their country sees best likely to fit in. Intensive debates have arisen that focus on the character of the Polish economy’s transformation and the society at large.
6 pages (1500 words) Dissertation
Comparison between the Greek Crisis of 2010 with the Argentinean crisis of 2001
The primary issues addressed in this paper comprise the state of the economies of the two countries at the time of recession, the sovereign bond default and its causes.
29 pages (7250 words) Dissertation
How the banking industry has been affected by online banking
According to Kalakota & Whinston (cited in Aladwani, 2001) last few years have witnessed profound technological changes among which is the advent of electronic commerce (IEC) or the exchange of products and payment via telecommunication systems. Internet technology holds the potential to fundamentally change banks and the banking industry allowing the individual banks to easily offer innovative products and access new customers (Sullivan, 2000).
4 pages (1000 words) Dissertation
How does online banking affect the banking industry
bal banking industry, traditional banks faced the problem of handling a large volume of customers and simultaneously to reduce per transaction cost in order to be profitable. Also, with availability of large volume of financial instruments, banks had to introduce various customer-centric products in the market, which increased the number of transactions, and old-model branch banking simply would not be cost effective.
35 pages (8750 words) Dissertation
The main characteristics of Turkish banking system and its response to recent global financial crisis
Moreover, the banking sector is not generating funds that can be injected into the real economy which can in turn improve the banking sector, its services and thus facilitate greater competition within the banks and among industries and private individuals.
40 pages (10000 words) Dissertation
How Has The Global Financial Crisis Impacted Consumer Behaviour with Reference to The UK Car Industry
obal Financial Crisis on the Automobile Sector in the United Kingdom 22 2.3 The Future of the Automobile Sector in the United Kingdom 26 2.4 Summary of the Literature Review 28 CHAPTER 3: RESEARCH DESIGN AND METHODS 29 3.1 Introduction 29 3.2 Research Philosophy 29 3.3 Research Approach 31 3.3.1 Deductive approach 34 3.3.2 Inductive approach 35 3.4 Research Design and Research Plan 35 3.5 Data Collection Methods 36 3.5.1 Secondary Data Collection 37 3.6 Data analysis and presentation 37 3.7 Limitations of this research 38 3.7.1 Validity 38 3.7.2 Reliability 39 3.7.3 Capacity for Generalisation of Research and its Conclusions 39 3.8 Ethical Considerations 39 3.8.1 Ethical Issues of the Researc
32 pages (8000 words) Dissertation
Factors contributing to Greece Financial crisis
This dissertation discovered substantial funds poured into Greece through the banks. But there has been no apparent transparency on the part of banks. Where the banks have been channelling the loans -- whether in the banks’ Investment Banking, or for private entrepreneurs—cannot be identified..
35 pages (8750 words) Dissertation
Russian Economy: Before and After the Crisis of 1998
This dissertation reveals a detailed review of the available literature on the various factors responsible for the financial crisis in the Russian economy and the economic progress made by the country in the post-crisis period. The Russian Federation experienced a sudden explosion of the barter and money surrogates during the period between the years 1995 and 1998.
43 pages (10750 words) Dissertation
Financial Crisis
Every corporation comprises of two different stakeholders – the shareholders and the managers – that normally face off with each other. The shareholders are interested in maximizing their wealth and hence tend to take higher risks in anticipation of higher gains whereas the managers tend to take lower risks to ensure lower managerial overheads.
60 pages (15000 words) Dissertation
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Click to create a comment
Contact Us