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dc.contributor.authorGlew, Ian Andrew
dc.contributor.otherQueen's University (Kingston, Ont.). Theses (Queen's University (Kingston, Ont.))en
dc.date2007-08-14 19:17:27.175en
dc.date2007-08-15 11:20:20.465en
dc.date.accessioned2007-08-22T13:11:23Z
dc.date.available2007-08-22T13:11:23Z
dc.date.issued2007-08-22T13:11:23Z
dc.identifier.urihttp://hdl.handle.net/1974/642
dc.descriptionThesis (Ph.D, Management) -- Queen's University, 2007-08-15 11:20:20.465en
dc.description.abstractIn the absence of taxes and transactions costs, there can be no benefit to corporate reorganization from a financial standpoint, but ‘real world’ limitations and frictions do provide additional value that is gained through divestitures in terms of focus and financial flexibility. Herein, the corporate divestiture decision is analyzed to determine the motivation for a parent company either to cleave its offspring directly to the external capital market in an equity carve-out or to distribute the shares to the existing shareholders in a tax-free spin-off. Cash flow performance, asymmetric information, relative size of the divestiture, and relatedness of the parent’s and subsidiary’s operations are all found to contribute significantly to the divestiture decision. In Canada, an alternate form of security, known as the income trust unit, has become popular for corporate reorganizations, either through an initial public offering or as a conversion of shares. The flow-through structure of income trusts currently allows avoidance of corporate taxation to offer higher pre-tax returns to retail investors, in a market setting where yield is increasingly equated with value. To determine placement of these securities in the market, the risk of the income trust organizational form is analyzed and compared to the standard corporate form. Further, a number of publicly known characteristics of the income trusts can predict the relative risk of this type of investment. In recent ‘hot markets’ for these securities, proof is uncovered that unsuitable firms have been migrating to this sector, but valuation of the investments in this sector has remained fair and full. Although pending legislation will discontinue the tax-exempt status of income trusts in 2011, during their tenure these securities have improved the Canadian market. Based on the data analysis herein, all types of divestitures studied have been predicted to provide commensurate value with respect to risk depending on the nature of the subsidiary.en
dc.format.extent680682 bytes
dc.format.mimetypeapplication/pdf
dc.languageenen
dc.language.isoenen
dc.relation.ispartofseriesCanadian thesesen
dc.rightsThis publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.en
dc.subjectDivestituresen
dc.subjectIncome trustsen
dc.subjectTax-free spin-offsen
dc.subjectCarve-outsen
dc.subjectCorporate financeen
dc.subjectVolatilityen
dc.subjectBootstrapen
dc.titleValue gain from corporate reorganizationen
dc.typeThesisen
dc.description.degreePh.Den
dc.contributor.supervisorDavis, Alfreden
dc.contributor.departmentManagementen


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