Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/18927
Title: Predicting
mergers
and
acquisitions
: a study of Tobin's Q.
Authors: Chong, Hui Shan.
Lim, Jian Liang.
Tan, Keng Tiong.
Keywords: DRNTU::Business::Finance::Mergers and acquisitions
Issue Date: 2009
Abstract: This paper attempts to document the relations between takeover probability and a comprehensive set of takeover determinants, with an emphasis on Tobin’s Q. We find firms characterized by low Q ratios are more likely to be the targets of takeovers. This study makes use of a modified methodology that takes into account industry-wide levels in Q ratios. The results indicate that the industry-adjusted Q produces a more significant and accurate measure in determining takeovers targets. Analysis has also been done to examine whether takeovers motivated by low Q ratios are due to market misvaluation or the Q-theory of investments. We find insignificant support for the Q-theory of investments which implies that management inefficiencies have limited explanatory power for the takeover sample in this study.
URI: http://hdl.handle.net/10356/18927
Rights: Nanyang Technological University
Fulltext Permission: restricted
Fulltext Availability: With Fulltext
Appears in Collections:NBS Student Reports (FYP/IA/PA/PI)

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