Lion Group

APPENDIX 11 Corporate Restructuring and Its Wealth Effects: The fact of social lion Group Abstract The case try come on evolves around four promulgations related to a specific incorporate restructuring proposal. The primary reason for the corporate restructuring is to reconstitute the debt of six companies, lion Industries (LICB), Silverstone (SCB), Amsteel Corp Berhad (ACB), king of beasts Corpo dimensionn (LCB), Lion Forest Industries (LFI) and Lion Diversified Holding Berhad (LDH). The track immortalise of the companies reveal that these companies wear been heavily levered causing them to be financially risky and therefore, extremely sensitive to any economic shocks, let alone such(prenominal) a fatal financial typhoon like the 1997 economic crisis. As at the end of the meditate compass point on June 30, 2003, that is, more than three years after the sign announcement of the proposed corporate restructuring, the plan has yet to complete. Nonetheles s, the present study manages to beat some interesting results. By applying the common event-study approach, the results assign that reading about the restructuring plan has been significantly conveyed to the market in each restructuring announcement. Generally, the market regards all announcements in event windowpane (-1,+1) unfavorably. 2.0 THE COMPANIES fiscal BACKGROUND 2.

1 THE COMPANIES FINANCIAL HISTORY The selected financial info in this study are selected based on its notional relationships with the probability of degenerate to meet its debt-service obligations. Ofek (1993) and Baek, et al. (2 001) apply two prefatorial variables, capi! tal mental synthesis and profitability, when examining the responses of financially distressed firms to poor performance. The capital structure characteristics used by Ofek (1993) are adopt including leverage and liquidity proportionalitys. leverage is deliberate by debt ratio and gearing ratio. Liquidity is prised by current ratio and quick or deadly test ratio. Performance measure used are ROE, ROA and Tobins Q. Over...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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