This paper examines the proposition that takeover targets may be forecasted by using similar methods as bankruptcy prediction which has been very successful in both the USA and the UK. The study shows that they cannot be predicted simply by using published accounting data as inputs into these models. It also examines the possibility of combining such data with anticipatory share price changes, which are also publicly available information, but this did not improve the predictive accuracy. These results support the efficient capital market hypothesis in the semi-strong form - that the market may not be beaten by using publicly available information alone. The fact that there are anticipatory price changes suggests that the market may not be efficient in the strong form.
|Number of pages||19|
|Journal||Journal of the Royal Statistical Society Series D: The Statistician|
|Publication status||Published - 1998|
- Efficient capital markets
- Insider dealing