Overpriced shares, Ill-advised acquisitions, and goodwill impairment

Accounting Review

Volumn 86, Issue 6, 2011, Pages 1995-2022

  Gu, Feng ^a   Lev, Baruch ^b  

^a UNIVERSITY AT BUFFALO   (United States)

^b NEW YORK UNIVERSITY   (United States)

Author keywords

Acquisitions; Goodwill write off; Overpriced shares

Indexed keywords

EID: 84055188836     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr-10131     Document Type: Article

References (33)

1. Anantharaman, D. 2007. Has SFAS 142 Diminished the Reliability of Goodwill Write-Offs? Working paper, Columbia University.
2. Baker, M., J. Coval, and J. Stein. 2007. Corporate financing decisions when investors take the path of least resistance. Journal of Financial Economics 84 (2): 341-372.
3. Baker, M., and J. Wurgler. 2006. Investor sentiment and the cross-section of stock returns. Journal of Finance 61 (4): 1645-1680. (Pubitemid 44181327)
4. Beatty, A., and J. Weber. 2006. Accounting discretion in fair value estimates: An examination of SFAS 142 goodwill impairments. Journal of Accounting Research 44 (2): 257-288. (Pubitemid 43937439)
5. Ben-David, I., J. Graham, and C. Harvey. 2007. Managerial overconfidence and corporate policies. National Bureau of Economic Research Working Paper No. 13711.
6. Bodnar, G., and J. Weintrop. 1997. The valuation of the foreign income of U.S. multinational firms: A growth opportunities perspective. Journal of Accounting and Economics 24 (1): 69-97. (Pubitemid 127163478)
7. Carhart, M. 1997. On persistence in mutual fund performance. Journal of Finance 52 (1): 57-82.
8. Chan, K., K. C. Chan, N. Jegadeesh, and J. Lakonishok. 2006. Earnings quality and stock returns. Journal of Business 79 (3): 1041-1082. (Pubitemid 43781282)
9. Daniel, K., and S. Titman. 2006. Market reactions to tangible and intangible information. Journal of Finance 61 (4): 1605-1643. (Pubitemid 44181326)
10. Dong, M., D. Hirshleifer, S. Richardson, and S. Teoh. 2006. Does investor misevaluation drive the takeover market? Journal of Finance 61 (2): 725-762. (Pubitemid 43388190)
11. Fich, E., J. Cai, and A. Tran. 2010. Stock option grants to target CEOs during private merger negotiations. Journal of Financial Economics 101 (2): 413-430.
12. Francis, J., D. Hanna, and I. Vincent. 1996. Causes and effects of discretionary asset write-offs. Journal of Accounting Research 34 (Supplement): 117-134. (Pubitemid 126678806)
13. Gompers, P., J. Ishii, and A. Metrick. 2003. Corporate governance and equity prices. Quarterly Journal of Economics 118 (1): 107-155. (Pubitemid 36263883)
14. Gow, I., G. Ormazabal, and D. Taylor. 2010. Correcting for cross-sectional and time-series dependence in accounting research. The Accounting Review 85 (2): 483-512.
15. Harford, J., and K. Li. 2007. Decoupling CEO wealth and firm performance: The case of acquiring CEOs. Journal of Finance 62 (2): 917-949.
16. Hayn, C., and P. Hughes. 2006. Leading indicators of goodwill impairment. Journal of Accounting, Auditing and Finance 21 (3): 223-265. (Pubitemid 44369715)
17. Hirshleifer, D., K. Hou, S. H. Teoh, and Y. Zhang. 2004. Do investors overvalue firms with bloated balance sheets? Journal of Accounting and Economics 38: 297-331. (Pubitemid 40131350)
18. Jensen, M. 2005. Agency costs of overvalued equity. Financial Management 34 (1): 5-19. (Pubitemid 40746960)
19. KPMG. 2010. Intangible Assets and Goodwill in the Context of Business Combinations: An Industry Study. Amstelveen, Netherlands: KPMG International.
20. Lehn, K., and M. Zhao. 2006. CEO turnover after acquisitions: Are bad bidders fired? Journal of Finance 61 (4): 1759-1811. (Pubitemid 44181331)
21. Li, Z., P. Shroff, R. Venkataraman, and I. Zhang. 2005. Causes and Consequences of Goodwill Impairment Losses. Working paper, University of Minnesota.
22. Loughran, T., and A. Vijh. 1997. Do long-term shareholders benefit from corporate acquisitions? Journal of Finance 52 (5): 1765-1790.
23. Pender, K. 2001. More about JDS Uniphase and that goodwill write-down. Available at: http://articles. sfgate.com/2001 -08 -07/business/l 7615666-1 Jds-uniphase-write-down-goodwill
24. Petersen, M. 2009. Estimating standard errors in finance panel data sets: Comparing approaches. Review of Financial Studies 22 (1): 435-480.
25. Polk, C., and P. Sapienza. 2009. The stock market and corporate investment: A test of catering theory. Review of Financial Studies 22 (1): 187-217.
26. Rhodes-Kropf, M., D. Robinson, and S. Viswanathan. 2005. Valuation waves and merger activity: The empirical evidence. Journal of Financial Economics 77 (3): 561-603. (Pubitemid 41179266)
27. Rhodes-Kropf, M., and S. Viswanathan. 2004. Market valuation and merger waves. Journal of Finance 59 (6): 2685-2718. (Pubitemid 40019739)
28. Roll, R. 1986. The hubris hypothesis of corporate takeovers. Journal of Business 59 (2): 197-216.
29. Savor, P., and Q. Lu. 2009. Do stock mergers create value for acquirers? Journal of Finance 64 (3): 1061-1097.
30. Shleifer, A., and R. Vishny. 2003. Stock market driven acquisitions. Journal of Financial Economics 70 (3): 295-311. (Pubitemid 37378891)
31. Sloan, R. 1996. Do stock prices fully reflect information in accruals and cash flows about future earnings? The Accounting Review 71 (3): 289-315. (Pubitemid 126174078)
32. Stein, J. 1996. Rational capital budgeting in an irrational world. Journal of Business 69 (4): 429-455. (Pubitemid 126314347)
33. Zenner, M., M. Matthews, J. Marks, and N. Mago. 2008. The era of cross-border M&A: How current market dynamics are changing the M&A landscape. Journal of Applied Corporate Finance 20 (2): 84-96.