Date of Award

1993

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Finance (Business Administration)

First Advisor

George M. Frankfurter

Abstract

The positive stock price reaction associated with the announcement of a corporate spinoff is well-documented but not yet explained. This work offers a new hypothesis: investor sentiment may affect the market response to the announcement of a spinoff. The results of an investigation using market-oriented proxies for investor sentiment support this hypothesis. Results of an analysis using non-market proxies for investor sentiment are not consistent with the above hypothesis. An analysis of the long-term effects on shareholder wealth of spinoffs is also conducted. It is found that pre and post-spinoff performance cannot be considered (statistically) significantly different.

Pages

147

DOI

10.31390/gradschool_disstheses.5600

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