Journal of Financial Services Research

, Volume 41, Issue 3, pp 103–120 | Cite as

Valuation Effects for Asset Sales

  • Jonathan A. WileyEmail author
  • Brandon N. Cline
  • Xudong Fu
  • Tian Tang


This study provides evidence that the outcome for shareholders resulting from asset sales is determined at the time of transaction by the value for the asset sold. Assets sold above market value are followed by positive and significant abnormal returns over the following three months; these returns are magnified in firms where the balance of power in corporate governance favors shareholders. Abnormal returns following undervalued asset sales are insignificant from zero, indicating value-preservation. Value-preservation when the assets are sold below market value becomes less likely as firms approach financial constraints. The reverse is true when assets are sold above market value. This evidence is documented for apartment REITs, which have a large number of comparable transactions available for estimating expected market values.


Asset sales Apartments REITs Corporate governance 

JEL classification

G31 G34 


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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  • Jonathan A. Wiley
    • 1
    Email author
  • Brandon N. Cline
    • 2
  • Xudong Fu
    • 3
  • Tian Tang
    • 4
  1. 1.School of Accountancy and FinanceClemson UniversityClemsonUSA
  2. 2.Department of Economics and FinanceMississippi State UniversityStarkvilleUSA
  3. 3.Department of Economics and FinanceSouthern Illinois University EdwardsvilleEdwardsvilleUSA
  4. 4.Department of FinanceUniversity of LouisvilleLouisvilleUSA

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