Combining Bonus systems and Option programs: A market reaction analysis on the Stockholm Stock Exchange
Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE creditsStudent thesis
This paper analyzes abnormal returns as a method of investigating if the market favors a bonus system adoption prior to an option program implementation. In a sample of 40 announcements, between 1996-2001, made by corporations listed on the Stockholm Stock Exchange, we find no favorable market reaction. In addition, when dividing the sample into suitable sub-groups, we find no evidence revealing a favorable market reaction. We conclude our findings by arguing that the market views the use of bonus systems, prior to the option program adoptions, as irrelevant. In addition, a practical valuation of option programs is presented.
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IdentifiersURN: urn:nbn:se:su:diva-2241OAI: oai:DiVA.org:su-2241DiVA: diva2:191160