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| Corporate Restructuring Involving Real
Estate Assets: Some Earnings and Risk Signal Implications Author: Donald G. Christensen and Donald R. Levi Start Page: 579 Abstract: Changes in common
stockholder wealth when companies announce purchases and sales of real estate assets may
result from changing investor perceptions about the risk, timing and/or amount of future
cash flows. The evidence suggests that neither sellers nor buyers experience changes in
firm risk for these transactions. However, sellers experience positive cash flow changes
in the announcement year while buyers experience positive cash flow changes in the
following year. Finally, for one-time purchasers, our study provides evidence that the
lower the earnings performance compared with expectations in the announcement year, the
greater the prediction errors. |
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