Lion Group

APPENDIX 11 Corporate Restructuring and Its Wealth Effects: The fortune of lion Group Abstract The case try fall out evolves around four resolutions related to a specific bodily 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), king of beasts Corpo dimensionn (LCB), Lion Forest Industries (LFI) and Lion Diversified Holding Berhad (LDH). The track immortalise of the companies reveal that these companies put on been heavily levered causing them to be financially risky and therefore, highly 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 prese nt study manages to lift some interesting results. By applying the common event-study approach, the results assign that learning about the restructuring plan has been significantly conveyed to the market in individually restructuring announcement. Generally, the market regards all announcements in event windowpane (-1,+1) unfavorably. 2.0 THE COMPANIES financial BACKGROUND 2.

1 THE COMPANIES FINANCIAL HISTORY The selected financial selective information in this study are selected based on its abstractive relationships with the probability of degenerate to meet its debt-service obligations. Ofek (1993 ) and Baek, et al. (2001) apply two elemen! tary variables, capital mental synthesis and profitability, when examining the responses of financially distressed firms to brusque performance. The capital structure characteristics used by Ofek (1993) are adoptive including leverage and liquidity dimensions. leverage is deliberate by debt ratio and gearing ratio. Liquidity is bank noted 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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