The valuation effects of tax legislation in corporate sell offs

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1988
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Virginia Polytechnic Institute and State University
Abstract

Corporate sell off activity has recently attracted considerable attention. The existence of excess returns for selling firm stockholders has been previously reported. This study attempts to identify the source of such gains by analyzing the impact of tax benefits involved in the sell off transaction. It is found that restrictions on transferability of the tax benefits reduce the realizable gains from sell offs.

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