Journal article
Corporate Cash Holdings and Acquisitions
Financial management, Vol.47(1), pp.159-173
03/22/2018
DOI: 10.1111/fima.12185
Abstract
We find that acquirers' announcement returns decline with their cash holdings, but only when at least part of the payment is in the form of stock. We further find evidence that acquirers that use stock payment are overvalued, especially when they have excess cash that they could have used instead. Collectively, our results suggest that investors interpret announcements of stock acquisitions as a signal that the acquirers' equity is overvalued and that high cash holdings intensify this signal. However, our results are inconsistent with the common belief that cash holdings induce value-destroying acquisitions.
Details
- Title: Subtitle
- Corporate Cash Holdings and Acquisitions
- Creators
- Erik Lie - University of IowaYixin Liu - University of New Hampshire
- Resource Type
- Journal article
- Publication Details
- Financial management, Vol.47(1), pp.159-173
- Publisher
- Wiley
- DOI
- 10.1111/fima.12185
- ISSN
- 0046-3892
- eISSN
- 1755-053X
- Number of pages
- 15
- Language
- English
- Date published
- 03/22/2018
- Academic Unit
- Finance
- Record Identifier
- 9984380436702771
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