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Earnings management, buyout group reputation and post-offering long-run stock performance of reverse LBOs

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thesis
posted on 13.05.2020 by Teng Yinzi ZHOU

This paper examines earnings management of private equity-backed IPOs around security offerings in a comprehensive sample of Reverse LBOs between 1981 and 2006. These RLBO companies are found to have positive level of discretionary current accruals (DCAs) at a much smaller magnitude compared to other IPOs. Buyout group's size is negatively related with the level of DCAs, suggesting that PE reputation mitigates accounting manipulations. Furthermore, PE reputation rather than earnings management can explain post-offering performance of RLBO companies.

History

Document type

Master thesis

Degree awarded

MSc in Finance

Year degree awarded

2010

Supervisor(s)

Jerry Cao

SMU School

Lee Kong Chian School of Business

No. of pages

38

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