Klitzka, Michael ; He, Jianan ; Schiereck, Dirk (2024)
The rationality of M&A targets in the choice of payment methods.
In: Review of Managerial Science, 2022, 16 (4)
doi: 10.26083/tuprints-00023548
Article, Secondary publication, Publisher's Version
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| Item Type: | Article |
|---|---|
| Type of entry: | Secondary publication |
| Title: | The rationality of M&A targets in the choice of payment methods |
| Language: | English |
| Date: | 2 April 2024 |
| Place of Publication: | Darmstadt |
| Year of primary publication: | May 2022 |
| Place of primary publication: | Berlin ; Heidelberg |
| Publisher: | Springer |
| Journal or Publication Title: | Review of Managerial Science |
| Volume of the journal: | 16 |
| Issue Number: | 4 |
| DOI: | 10.26083/tuprints-00023548 |
| Corresponding Links: | |
| Origin: | Secondary publication DeepGreen |
| Abstract: | This study analyzes mergers and acquisitions (M&A) payment methods in large transactions of public U.S. acquirers between 2009 and 2016. While we find consistent with previous evidence that asymmetric information between acquirers and targets significantly influences the choice of M&A payment methods, we show that contrary to prevailing findings in the literature, acquirers cannot exploit their overvaluation through stock-financed M&A at targets’ disadvantage. In addition, when facing larger uncertainty in the counterparty’s valuation, a higher ratio of cash is applied in M&A payment. Our results document that both acquirers and targets are rational in choosing M&A payment methods. |
| Uncontrolled Keywords: | Mergers and acquisitions (M&A), Choice of payment methods, Rational payment design, Equity overvaluation and misvaluation, Information asymmetry |
| Status: | Publisher's Version |
| URN: | urn:nbn:de:tuda-tuprints-235481 |
| Additional Information: | JEL Classification: G14 Mathematics Subject Classification: 91G50 Corporate finance (dividends, real options, etc.) |
| Classification DDC: | 300 Social sciences > 330 Economics 600 Technology, medicine, applied sciences > 650 Management |
| Divisions: | 01 Department of Law and Economics > Betriebswirtschaftliche Fachgebiete > Corporate finance |
| Date Deposited: | 02 Apr 2024 11:28 |
| Last Modified: | 03 Apr 2024 06:35 |
| SWORD Depositor: | Deep Green |
| URI: | https://tuprints.ulb.tu-darmstadt.de/id/eprint/23548 |
| PPN: | 516763997 |
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