Financial analysis of a corporate event

: "EC vs Apple tax battle"

Abstract

The present dissertation consists on the financial analysis of a corporate event. It investigates the impact of the $15 billion penalization charged by the European Commission to Apple Inc. This penalization represents the largest-ever tax penalization ruled by the EC. It was the result of an investigation regarding illegal state aid obtained by Apple’s Irish subsidiaries. This study tries to assess the effect not only on Apple’s stock price but also its possible ramifications. For the purpose of comparison it includes the analysis of two similar cases, concerning Fiat and Starbucks. All three companies were investigated for the same motive at the same point in time, differing in the country and on the fine amount. Additionally, it comprises an extensive description of the statistical methods I adopted, which are typically used in even studies. I found the event had a significantly negative impact on Apple of approximately $10 billion. However, I did not find significance evidence of a spillover effect to other technology companies belonging to Fortune 500 or to the Irish financial market. Additionally, I found the magnitude of the effects on the other two firms was distinct and I provide an analysis of potential explanations.

Date of Award	19 Jul 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Geraldo Cerqueiro (Supervisor)