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Analysis of Motives of Selling Company Assets

Samwel Marwa Werema

Abstract: The paper analyses the motives of selling company assets. The evidence is provided that corporate managers undertake asset sales because of poor performance, high levels of financial leverage, and excessive diversification. It is also apparent that companies may have been forced to sell assets owing to pressure from lenders, and from external corporate markets. It is also provided that the market reacts positively to announcements of asset sales. Thus, asset sales create wealth for shareholders. Finally, the market also reacts positively to announcements of firms which state that they are using the proceeds from asset sale to service debt, apparently to avoid bankruptcy costs.

Keywords: asset sales; corporate restructuring; event study; operating performance

Country: Tanzania, Subject Area: Business Management

Pages: 747 - 751

Edition: Volume 8 Issue 7, July 2019

How to Cite this Article?

Samwel Marwa Werema, "Analysis of Motives of Selling Company Assets", International Journal of Science and Research (IJSR), https://www.ijsr.net/archive/v8i7/show_abstract.php?id=ART20199563, Volume 8 Issue 7, July 2019, 747 - 751

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