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- Title
An Investigation of the Gains from Specialized Equity Claims.
- Authors
Boone, Audra; Haushalter, David; Mikkelson, Wayne
- Abstract
We investigate whether operating performances improves when a firm creates traded equity claims on a subsidiary without relinquishing control. We find that the change in a parent firm's operating performance following an equity carve-out is negatively related to the fraction of subsidiary shares that the parent firm retains after a carve-out. Operating performance of parent firms improves only when the parent completely divests its ownership of the subsidiary. We also find no improvement in operating performance following the creation of tracking stock. We conclude that corporate restructuring without relinquishing control of assets does not enhance operating performance.
- Subjects
SUBSIDIARY corporations; PARENT companies; TRACKING stock; STOCKS (Finance); CORPORATE reorganizations
- Publication
Financial Management (Wiley-Blackwell), 2003, Vol 32, Issue 3, p67
- ISSN
0046-3892
- Publication type
Article
- DOI
10.2307/3666384