ACCT 401

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ACCT401 Written Assignment
Please submit your term paper (electronic copy) to Titanium before December 7, 2020, at 11:59 PM (PT). For Part A, you should submit your individual write-up. For Part B, you can collaborate with three other students (Max number of members is 4). Teams only submit one paper for all members, with names listed prominently on the front.
Format

  • Double spaced, with 12 point Times New Roman font and a minimum of 1” margin from all sides).
  • For the full sample of M&A events, use the excel file, “MA events with CAR.”
  • For the detailed description of variables, refer to the “GSIOnline_MA_Database_Manual.pdf.”
  • For sample research papers, please read Louis 2005 JAE, and Ma et al. 2009 IJB. You don’t need to include literature review, correlation, multivariate regression analysis in your paper.

Note:

  • Please add the reference list if you cite a paper or extract it from a website.
  • You can obtain electronic copies of annual reports from EDGAR (Electronic Data Gathering, Analysis, and Retrieval; http://www.sec.gov/edgar/searchedgar/companysearch.html). EDGAR performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by law to file forms with the SEC. All publicly-traded domestic companies use EDGAR to make the majority of their filings.

Part A. Short-term market reaction to the M&A – how do investors respond to M&A announcement?
Required: Prepare a 3-4 pages paper that summarizes your finding. Please spend pages 1 and 2 for writing and page 3 and/or 4 for tables or figures.
Outline:

  1. Introduction – Full-sample analysis
  • Clearly define the full sample events provided (time period, data source: GSI online)

https://wrds-www.wharton.upenn.edu/pages/about/data-vendors/gsionline/
See Louis 2005 (section 2. Sample Selection) as an example of defining the sample.

  • Summarize the statistics (n, mean, first quartile (25%), median (50%), third quartile (75%)) of the two-days cumulative abnormal return from the announcement date (CAR01) for the acquirer.
  1. Main – Sub-sample analysis
  • Choose any sub-sample based on the variables provided (e.g., time period, deal specification, transaction value, etc.). Pick 50 M&As for your sub-sample.
  • Clearly define your sub-sample.
  • Summarize the statistics of CAR01 for the acquirer.
  • Compare the mean and median of CAR01 of your sub-sample and the full sample.
  1. Conclusion – Interpretation and discussion of your findings (i.e., why does your sub-sample show higher or lower M&A announcement return compared to the full sample?).