Reliability of Brokerage Recommendations in Context of M&A Transactions on Polish Stock Exchange Market
Reliability of Brokerage Recommendations in Context of M&A Transactions on Polish Stock Exchange Market

Summary/Abstract: Information efficiency of the stock exchanges is wide and capacious subject and its analysis in the modern economy would require hundreds of variables to takeinto account in terms of their impact on the market. Brokerage recommendations havebig impact on stocks and play an important role in reducing the information asymmetrybetween company managements and investors. Literature research indicates, that the valuation of the companies deducted in the recommendations differ from their real future market value, moreover, they are often overestimated. The mentioned phenomenon alsooccurs in the case of mergers and acquisitions. The aim of the article is to evaluate thepracticality of the recommendations in context of M&A. Hypothesis is that brokerage recommendations,prepared for M&A purpose, are miscalculated.

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