AN ANALYSIS OF THE IMPACT OF ANTITAKEOVER AMENDMENTS ON COMMON STOCK PRICES
Abstract
"Antitakeover" amendments are amendments to a corporation's charter that impede the ability of an "outsider" to gain control of the firm. A number of individuals and institutions have objected to such amendments on the grounds that they are not in the best interests of the shareholders of the firms that adopt them. This thesis considers two competing hypotheses regarding the conditions under which antitakeover amendments will be adopted and the consequent impacts on shareholder wealth that should be observed. The study then employs event-time methodology to investigate the impact of antitakeover amendments on the common stock prices of firms that adopt them. The empirical results indicate that antitakeover amendments are associated with a positive revaluation of stock prices. Contrary to the concerns of their critics, the study concludes that antitakeover amendments are proposed by managers who seek to increase the value of the firm and are approved for adoption by shareholders who share that objective.
Degree
Ph.D.
Subject Area
Business community
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