Journal of Financial Economics Vol. 6 No. 4 1978
An application of a three-factor performance index to measure stockholder gains from merger
Abstract
This article re-examines the magnitude of stockholder gains from merger. To measure stockholder gains we employ four alternative two-factor market-industry models in combination with a matched non-merging control group. The four two-factor models are based on either the capital asset pricing model or Black's (1972) zero-beta model combined with two alternative industry factors. The four models are shown to produce generally consistent results. However, the results from a two-factor model are sometimes different from the results of a simpler one-factor model. Also, the introduction of a third factor, the non-merging control group, is shown to have a substantial impact on performance measurement.
- DOI
- 10.1016/0304-405x(78)90010-7
- Volume
- 6
- Issue
- 4
- Pages
- 365-383
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref