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Financial performance is an essential instrument in decision making. However, over time, many researchers stated that the relevance of financial statement information had decreased so that investors did not respond positively to financial performance. Furthermore, investors view corporate action simply because it adds value and growth to the company. This study was conducted to compare investor responses to M&A and financial performance. We tested the model on a sample of 213 companies from the consumer goods sector in ASEAN with CAR as the dependent variable, dummy, EPS, ROA, and CFO / TA as independent variables, and firm size and firm leverage as control variables. We found that investors responded negatively to M&A, while financial performance as measured by ROA and CFO / TA reacted positively. From these findings, we propose that company managers can consider a strategy of conducting M&A to attract investors and add value to the company.
Juniarti et al. (Fri,) studied this question.