Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10475250 | Journal of Empirical Finance | 2012 | 25 Pages |
Abstract
⺠We test hypotheses about impact of target shareholders' preferences on method of payment and premiums in acquisitions. ⺠Stock offers (unlike cash offers) allow target shareholders to defer capital gains taxes. ⺠The deferral value, however, depends on target shareholders' willingness to retain acquirer stock. ⺠We show bid premiums are negatively related to target shareholder tax liabilities and preference for acquirer stock. ⺠Difference between predicted cash and stock premiums significantly explains method of payment choice.
Related Topics
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Authors
Timothy R. Burch, Vikram Nanda, Sabatino Silveri,