Imperial College London
Portrait Picture

Dr Claudia Custodio

Business School

Associate Professor of Finance
 
 
 
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Contact

 

+44 (0)20 7594 9249c.custodio Website CV

 
 
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Location

 

4.0953 Prince's GateSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Custodio:2014:10.1111/jofi.12108,
author = {Custodio, C},
doi = {10.1111/jofi.12108},
journal = {The Journal of Finance},
pages = {219--240},
title = {Mergers and acquisitions accounting and the diversification discount},
url = {http://dx.doi.org/10.1111/jofi.12108},
volume = {69},
year = {2014}
}
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RIS format (EndNote, RefMan)

TY  - JOUR
AB  - qbased measures of the diversification discount are biased upward by mergers and acquisitions and its accounting implications. Under purchase accounting, acquired assets are reported at their transaction value, which typically exceeds the target's premerger book value. Thus, measured q tends to be lower for the merged firm than for the portfolio of premerger entities. Because conglomerates are more acquisitive than focused firms, their q tends to be lower. To mitigate this bias, I subtract goodwill from the book value of assets and a substantial part of the diversification discount is eliminated. Markettosalesbased measures do not have this bias.
AU  - Custodio,C
DO  - 10.1111/jofi.12108
EP  - 240
PY  - 2014///
SN  - 0022-1082
SP  - 219
TI  - Mergers and acquisitions accounting and the diversification discount
T2  - The Journal of Finance
UR  - http://dx.doi.org/10.1111/jofi.12108
UR  - http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000334517800006&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=1ba7043ffcc86c417c072aa74d649202
UR  - https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12108
VL  - 69
ER  -
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