Corporate Takeover Bids, Methods of Payment, and Bidding Firms Stock Returns: The Effects of Leverage
Document Type
Article
Keywords
corporate business; takeovers; methods of payment; bidding firms; stock returns
Identifier Data
https://www.jstor.org/stable/40473028
Publisher
Creighton University, College of Business
Abstract
Recent research examining the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids shows significant differences between the abnormal returns in cash and stock transactions. These differences may reflect differences in changes in leverage in addition to, or perhaps rather than, differences in method of payment. This study tests for a leverage effect while controlling for the method of payment. The results indicate a strong leverage impact on the abnormal returns to acquiring firms' shareholders in addition to the method of payment effect.
Comments
Published by Creighton University, College of Business in the Quarterly Journal of Business and Economics, volume 30 issue 3, 1991. Bryant users may access this article here.