Effect of corporate name changes on value of companies

• Main Authors: Choy, Chun Yen, Lim, Hwee Ee, Shen, Pei Ling
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2014
• Subjects: DRNTU::Business
• Online Access: http://hdl.handle.net/10356/55594
• Institution: Nanyang Technological University

This study has three purposes, viz., ( 1) to identify the reasons for changing a corporate name and the types of expenditures incurred in the name change process; (2) to identify the perception of general investors towards the companies with regards to their name changes; and (3) to analyse how the stock market in Singapore reacts to announcements of corporate name change. Two research methods, v1z., questionnaire surveys (on general investors and companies changing their names during the period January 1989 to June 1994) and event study (using data collected from January 1989 to July 1994) have been applied in this study. This study revealed that corporate name changes would not affect the value of companies. The stock prices would not react significantly to name change announcements. The five functional characteristics (Distinctive, Relevant, Memorable, Flexible and Positive) of corporate names were also found to have no significant impact on investors' investment decisions. This study concludes that name change cannot be used as an effective tool for market repositioning. Due to our time and financial constraints, this study is restricted to companies listed on the Stock Exchange of Singapore.