Title page for ETD etd-07012012-160942


Document Type Master's Dissertation
Author Hugo, Jan-Hendrik
URN etd-07012012-160942
Document Title Acquisitions and the demand curve for securities : does company size matter?
Degree MBA
Department Gordon Institute of Business Science
Supervisor
Advisor Name Title
Mr K Thaver Supervisor
Keywords
  • acquisitions
  • company size
  • demand curve
  • announcements
Date 2012-03-08
Availability unrestricted
Abstract
The frequency with which acquisitions occur in the South African business environment served as motivation to evaluate the effect of acquisition announcements on the share performance of JSE listed shares. The basis of the study was to use event study methodology to evaluate short term effects as well as to investigate size effects in acquisition announcements. Companies were grouped into small and large companies using market capitalisation as segmentation criteria.

To evaluate effects on the share price and volume traded, the market demand curve for traded securities was used. It proved to be a useful tool specifically in the evaluation of smaller companies, where information asymmetry was prevalent. The shift in the demand curve was evaluated by constructing a Demand Curve Variable, which showed the direction (if any) of the change in the demand curve.

Acquisition announcements by JSE listed companies over the last seven years were evaluated and confounding events were controlled for. The findings supported the fact that there exist differences in the results of the small and large company samples when making acquisition announcements, and that small companies have more pronounced negative effects subsequent to the announcement of an acquisition.

2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.

Please cite as follows:

Hugo, JH 2011, Acquisitions and the demand curve for securities : does company size matter?, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-07012012-160942 / >

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