The valuation discount of multi-segment firms in Australia

Authors: Fleming G.1; Oliver B.2; Skourakis S.3

Source: Accounting and Finance, Volume 43, Number 2, July 2003 , pp. 167-185(19)

Publisher: Blackwell Publishing

Key:
Free Content - Free Content
New Content - New Content
Subscribed Content - Subscribed Content
Free Trial Content - Free Trial Content

Abstract:

This paper refines the Berger and Ofek (1995) methodology to estimate the valuation discount of multi-segment firms in Australia between 1988 and 1998. Evidence is found that based on earnings before tax, the sample of multi-segment firms traded at a 29 per cent greater discount than a comparable portfolio of single segment firms over the sample period. To explain the results further analysis shows that the valuation discount was driven by poorly performing multi-segment firms rather than multi-segment firms per se. This raises questions about studies that conclude that diversification is value destroying.

Keywords: Ownership structure; Diversification

Document Type: Research article

DOI: 10.1111/1467-629X.00087

Affiliations: 1: Wilshire Australia, Canberra, Australia and the School of Finance and Applied Statistics, Australian National University, ACT, Australia 0200 2: School of Finance and Applied Statistics, Australian National University, ACT, Australia 0200 3: Deloitte Touche Tohmatsu, Sydney, Australia

The full text electronic article is available for purchase. You will be able to download the full text electronic article after payment.

$41.89 plus tax      Refund Policy

 

OR

Back to top

Key:
Free Content - Free Content
New Content - New Content
Subscribed Content - Subscribed Content
Free Trial Content - Free Trial Content
Share this item with others: These icons link to social bookmarking sites where readers can share and discover new web pages.
Page Help Click here for Page Help
Shopping cart
Tools
Sign in






Need to register?
Sign up here
Text size: A | A | A | A