In this paper we try to find out the impact of a carve-out on the standard deviation of earning per share (EPS) forecast (divergence of belief) and the number of analysts following the firm. We were expecting that the standard deviation of EPS forecast will decrease after the carve out as more...

Using a sample of equity carve-outs offered over the period of 1985-2015, we find out the time at which the market can know the effects of an equity carve-out on the wealth of existing shareholders. In equity carve-outs, the parent holds a significant fraction of the carved-out subsidiary....