Market/investor Misvaluation Effect Merger and Aquisition Activity - Literature review Example

Only on StudentShare

Extract of sample
Market/investor Misvaluation Effect Merger and Aquisition Activity

When firms decided to merge or acquire it faces many issues among them one of the important problem is its valuation or the payments. Sometimes the companies may make misevaluation in its stock misevaluation of stock means artificially increase the value of share. Overvalued firm use their overvalued shares to purchase comparatively undervalued firm. If managers are confident regarding the performance of the firm after the merger market valuation is less matter. “If bidder managers are overconfident, market valuation should matter less, because overconfident managers would not perceive their firms as overvalued by the market. In this case, target preferences would probably be of primary importance” (Giuli 2007, p. 8). According to Todd A. Brown in his article called, “Managerial Optimism and Market Misvaluation: the Effects on Mergers and Acquisitions” says that, Mergers and acquisitions between the companies can be viewed as a one of the most efficient device for correcting the inefficiency of the market. One of the major assumptions behind this is that markets are basically inefficient or ineffective, so some of the organizations are valued wrongly. In this particular circumstance, managers of the organizations are unbiased and they take benefit of that ineffectiveness of the market. Therefore market valuations can drive M&A. ...Show more

Summary

Market/Investor Misvaluation Effect Merger and Acquisition Activity Literature Review: Introduction: When a company under take another company and it clearly established under the new owner is called as acquisition of company. When two companies same size and doing same business agreed to go forward as a new single company it is called as merger of companies…
Author : kennethkunze
Market/investor Misvaluation Effect Merger and Aquisition Activity essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the literature review on your topic
"Market/investor Misvaluation Effect Merger and Aquisition Activity"
with a personal 20% discount.
Grab the best paper

Related Essays

Efficient Market Hypothesis: Is the Stock Market Efficient
Efficient Market Hypothesis: Is the Stock Market Efficient? Introduction Efficient Market Hypothesis (EMH), introduced four decades ago, was the dominating theory in the academic community that explained how the financial market works. Nowadays, although it is challenged by both the theoretical and practical studies (e.g.
7 pages (1750 words) Literature review
The effect of economic crisis to the marketing strategy of Volkswagen in Asian market - The Case of Vietnam
ure Review 1.1 Introduction The literature review presented in this section would try to shed light on the various factors relevant to the present research study. Since the primary objective of this research study is to gain an insight into the impact of global economic downturn on the marketing strategies followed by Volkswagen in the Asian market and Vietnam, it is necessary to review the existing literature related to the various impacts that the global financial crisis had on the automotive industry.
22 pages (5500 words) Literature review
The effect of economic crisis to the marketing strategy of Volkswagen in Asian market: The case of Vietnam
The present study is about evaluating the effect of economic crisis to the marketing strategy of Volkswagen in Asian market. In accordance with the area of study and the objective of the study, a suitable research method has been designed. Through this designed research process, it can be said that the objective of the study will be fulfilled.
10 pages (2500 words) Literature review
Calendar effects (seasonalities). January Effect , The Day of the Week Effect, The Holiday Effect
Not all but some of these anomalies are widely referred as calendar effects. Calendar anomalies such as the day of the week effect, monthly or January effect, the trading month effect, and holiday effect in stock exchange markets have perplexed financial economists for more than 50 years.
8 pages (2000 words) Literature review
Do British Secondary School Children Meet Current Physical Activity Guidelines
Importantly, the establishment of relevant patterns of school children’s physical activity impacts their health in the future when they reach adolescence and adulthood (Telama et al, 2005: 267). Respectively, supporting one’s physical activity on relatively high levels ensures that the lowering of the risk of various diseases, even chronic ones, such as obesity (Yang, 2006: 919).
3 pages (750 words) Literature review
The Importance of Company Valuation to Investor, the Shortcoming of DCF Mode
In other words, such investors feel that risk is intrinsic to any investment. This belief is somehow misconstrued as the risk to an investment is always relative to the price paid. Hence, instead of focusing on the uncertainty that an investment may face such as volatility, it is recommended that investors measure the risks associated with their investments by valuation, which has more importance to investors than risks (Pratt, 1998).
5 pages (1250 words) Literature review
Market/investor misvaluation effect merger and aquisition activity
In acquisition and merger some companies make payments in cash or stocks or the combination of the two. When firms decided to merge or
8 pages (2000 words) Literature review
The effect of economic crisis to the marketing strategy of Volkswagen in Asian market. The case of Vietnam
Literature Review: The literature review would try to shed light on the various factors relevant to the present research study. All relevant literature dealing with the impact of global
5 pages (1250 words) Literature review
The effect of economic crisis to the marketing strategy of Volkswagen in Asian market. The case of Vietnam
The questionnaire consisted of a combination of open ended and closed ended questions. The respondents to the study were the marketing mangers of Volkswagen, Vietnam. According to their responses to the question, the study will now discuss and
20 pages (5000 words) Literature review
Physical Activity characteristics (barriers/facilitators/motivators)
It plays a significant role to improve health and quality life. Physical activities have advantageous effects on different age of people, children, adults or older adults. According to the Health and Human Service Report (2012)
24 pages (6000 words) Literature review
Get a custom paper written
by a pro 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