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Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: An empirical analysis of the stockholder-bondholder conflict in corporate spin-offs
Author(s): Veld, Chris
Veld-Merkoulova, Yulia V
Keywords: Spin-off
Wealth transfer
Stocks Prices
Bonds Prices
Investment analysis
Issue Date: 2008
Date Deposited: 25-Apr-2008
Citation: Veld C & Veld-Merkoulova YV (2008) An empirical analysis of the stockholder-bondholder conflict in corporate spin-offs. Financial Management, 37 (1), pp. 103-124.
Abstract: We analyze the effect of daily stock and bond abnormal returns around spin-off announcements. Over a three-day event window, we find statistically significant abnormal returns of 3.07% for stocks and 0.11% for straight bonds. Both stock and bond abnormal returns are higher for firms with lower interest and dividend payouts. Stock abnormal returns are also higher for firms with higher pre-spin-off leverage. Overall, we find that the firm value increase compensates for the wealth transfer effect and that bondholders’ wealth is not reduced as a result of spin-off.
DOI Link: 10.1111/j.1755-053X.2008.00006.x
Rights: The definitive version is available at

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