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The valuation discount of multi-segment firms in Australia

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Date

2003

Authors

Fleming, Grant
Oliver, Barry
Skourakis, Steve

Journal Title

Journal ISSN

Volume Title

Publisher

Blackwell Publishing Ltd

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.

Description

Keywords

Keywords: Diversification; Ownership structure

Citation

URI

http://hdl.handle.net/1885/74792

Collections

ANU Research Publications

Source

Accounting and Finance

Type

Journal article

Book Title

Entity type

Access Statement

License Rights

DOI

10.1111/1467-629X.00087

Restricted until

2037-12-31

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01_Fleming_The_valuation_discount_of_2003.pdf (149.02 KB)

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