Technical Note on Equity-Linked Consideration Part 2: Announcement Effects Harvard Case Solution & Analysis

The announcement of a merger or acquisition sends new information to capital markets. Shareholders and portfolio managers to assess news and trade on the basis of its new cost estimates. Thus, the actual Pstks two companies can be concluded from these values ‚Äč‚Äčthat investors "think" of the transaction. Changing Pstk recent closing price before the announcement of the closing price on the day after is called the (one-day) announcement effect. This case series describes the basic mechanics of equity-linked consideration. Part 2 describes the mechanisms that underlie the announcement effects for both target and acquiring companies in all stock transactions. "Hide
by Carliss Y. Baldwin, 6 pages. Publication Date: September 18, 2002. Prod. #: 903028-PDF-ENG

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