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Market efficiency?: A Good(will) test
Jönköping University, Jönköping International Business School.
Jönköping University, Jönköping International Business School.
Jönköping University, Jönköping International Business School.
2005 (English)Independent thesis Basic level (degree of Bachelor), 10 points / 15 hpStudent thesis
Abstract [en]

Problem: Recent articles argue that the new accounting standard regarding abandonment of depreciation of goodwill will cause a rise in share prices. According to the Efficient Market Hypothesis, a rise in profits due to accounting changes should not cause an increase in share prices. Therefore we ask the following main question in our thesis: Do investors on the Stockholm Stock Exchange act semi-strong efficient in relation to the abandonment of linear depreciation of goodwill?

Purpose: The purpose of this study is to test the semi-strong form of market efficiency on the Stockholm Stock Exchange by studying if companies show positive abnormal returns caused by the removal of linear depreciation of goodwill.

Method: Both a qualitative and quantitative approach was used to investigate semi-strong market efficiency. We conducted an event study to measure if companies with a high degree of goodwill showed abnormal returns. To be able to see if the abnormal returns were caused by the new accounting standards, a qualitative research was made.

Conclusion: The empirical investigation indicates that investors acted semistrong efficient in relation to the abandonment of linear depreciation of goodwill.

Place, publisher, year, edition, pages
2005. , p. 65
Keywords [en]
Market efficiency, Goodwill
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-137OAI: oai:DiVA.org:hj-137DiVA, id: diva2:3833
Uppsok
samhälle/juridik
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Available from: 2005-06-23 Created: 2005-06-23

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CiteExportLink to record
Permanent link

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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf