Lion Group

APPENDIX 11 Corporate Restructuring and Its Wealth Effects: The oddball of lion Group Abstract The case try break evolves around four annunciations related to a specific corporal restructuring proposal. The primary reason for the corporate restructuring is to reconstitute the debt of six companies, lion Industries (LICB), Silverstone (SCB), Amsteel Corp Berhad (ACB), social lion Corpo proportionalityn (LCB), Lion Forest Industries (LFI) and Lion Diversified Holding Berhad (LDH). The track immortalise of the companies reveal that these companies consent been heavily levered causing them to be financially risky and therefore, super sensitive to any economic shocks, let alone much(prenominal) a fatal financial typhoon like the 1997 economic crisis. As at the end of the meditate compass point on June 30, 2003, that is, more than three years after the sign announcement of the proposed corporate restructuring, the plan has yet to complete. Nonetheless, the p resent study manages to build up some interesting results. By applying the common event-study approach, the results assign that info about the restructuring plan has been significantly conveyed to the market in each(prenominal) restructuring announcement. Generally, the market regards all announcements in event windowpane (-1,+1) unfavorably. 2.0 THE COMPANIES pecuniary BACKGROUND 2.1 THE COMPANIES FINANCIAL HISTORY The selected financial selective information in this study are selected based on its metaphysical relationships with the probability of degenerate to meet its debt-service obligations. Ofek (1993) and Baek, et al. (2001) apply two basic variables, capital mental synthesis and profitability, when examining the responses of financially distressed firms to piteous performance. The capital structure characteristics used by Ofek (1993) are pick out including leverage and liquidity balances. leverage is deliberate by debt ratio and gearing ratio. L iquidity is treasured by current ratio and ! quick or deadly test ratio. Performance measure used are ROE, ROA and Tobins Q. Over...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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