Corporate Sale‐and‐Leasebacks and Shareholder Wealth

MYRON B. SLOVIN, Marie Sushka, JOHN A. POLONCHEK

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33 Scopus citations

Abstract

In this paper, we examine the market valuation effects of corporate sale‐and‐leasebacks. Specifically, we test whether such transactions offer a net benefit to lessees or lessors by evaluating the impact on share prices from announcements of sale‐and‐leasebacks of major corporate assets. Our evidence indicates that the announcements are associated with positive abnormal returns to lessees. We conclude that this positive market reaction results from an overall reduction in the present value of expected taxes occasioned by the transactions. Our evidence also suggests that the gains from sale‐and‐leasebacks accrue solely to lessee firms. 1990 The American Finance Association

Original languageEnglish (US)
Pages (from-to)289-299
Number of pages11
JournalJournal of Finance
Volume45
Issue number1
DOIs
StatePublished - 1990
Externally publishedYes

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ASJC Scopus subject areas

  • Accounting
  • Economics and Econometrics
  • Finance

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