In this assignment, you will examine whether there is a change in the premium paid to the acquisition targets in the post-Covid period compared to the pre-Covid period. For the examination, please follow the below steps:
1) In CapitalIQ, go to Screening > Transactions
2) In the “View Criteria” section, please enter your filters. We would like to make our analyses for all acquisitions where acquirers are in the United States, transaction type is Mergers/Acquisitions,acquirers are public, M&A announced date is between 1/1/2017 and 1/1/2023, the percentage that acquirer demanded is greater than 20% of the company, and the total transaction value is greater than $20 million.
3) After applying these filters, the screen should look as below (there may be a slight change in the number of observations as CapitalIQ backfills the data. However, I don’t expect it to be more than one or two observations).
4) Please click “Customize Display Columns” and request some extra fields for download. In this homework, as you need premiums paid to the targets, please include “Target Stock Premium- 1 Day Prior (%)” to the list. You can also request some other information such as the year of foundation to calculate age or industry code (SIC) if you would like to add further controls to the regression described in 7). Please don’t forget to click “Update Results” after you complete your choices. After your selections, the CapitalIQ screen should look as follows:
5) After downloading the data as an Excel file, please import it to Stata using the “import excel” function.
You may need to adjust some of the options of this function to gather the data in the desired format.
6) You may need to convert “TargetStockPremium1DayPri” to a numeric format. For conversion, you can use the “destring” function. However, since the variable may represent missing variables by “-”, you may need to replace “-” with “” before applying the destring function.
7) Please run the following regression:
Target Premiumi,t = βo + β Log(Transaction V alue )XPosti,t + B2Log(Transaction Value)i,t + B3Posti,t + β4 Completedi,t + Ei,t
where Target Premium is the Target Stock Premium-1 Day Prior (%), Log (Transaction Value) is the logged Total Transaction Value in $mil, Completed is a dummy variable that equals one if the acquisition transaction status is closed, and it is zero if the deal is canceled (You can drop observations if TransactionStatus is Announced, Effective etc.). Post is a dummy variable that equals one if the deal announcement date is 2020 and after, and zero otherwise.
8) Please provide summary statistics for each of the variables using the summarize command.
9) Please provide the regression output.
10) Please interpret the economic significance of the coefficient estimates (i.e., how much change in the dependent variable if there is a one-standard deviation change in the independent variables). To have a better understanding of the logged transformed independent variable, you can also examine:
11) As a separate test, please winsorize Target Premium and Log(Transaction Value) at the 1% level, and provide the regression output and economic significance of the results. To install winsorize function to Stata, you can write “help winsorize” and find the download link and the help file. Alternatively, you can type: “ssc install winsor” or “ssc install winsor2” in Stata command frame. I would like to mention that there are various sources on the web for winsorization.
本网站支持 Alipay WeChatPay PayPal等支付方式
E-mail: firstname.lastname@example.org 微信号:vipnxx