This study measures the role of spin-offs and their respective effects on the share prices of the parent companies in our sample. The main purpose of this event study is to determine whether the announcements of the spin-offs are significant market-mo...
This study measures the role of spin-offs and their respective effects on the share prices of the parent companies in our sample. The main purpose of this event study is to determine whether the announcements of the spin-offs are significant market-moving events based on our observed variables. We examine the relationship between abnormal return and hedge fund holding, market capitalization, and leveraged capital structure. The event window consists of a three-day period: the day of the announcement (0), the preceding day (-1), and the succeeding day (+1). When we evaluate this relationship, descriptive evidences suggest that the abnormal returns on the announcement dates have a significant relationship with the pre-spin-off leveraged capital structure, resulting in a positive impact on the abnormal returns and change in share prices. However, it is not the case for the other two variables