Journal article
Time trends and determinants of the method of payment in M&As
Journal of corporate finance (Amsterdam, Netherlands), Vol.27, pp.296-304
08/01/2014
DOI: 10.1016/j.jcorpfin.2014.05.015
Abstract
We examine the time trends and determinants of the method of payment in M&As spanning four decades. The fraction of mixed payments tripled from about 10% before the turn of the century to 30% in the new century, while the fraction of stock (cash) payments peaked (bottomed out) in the late 1990s but has since plunged (surged). We can explain a portion, but not all, of these trends using explanatory variables linked to adverse selection theory, taxation, and contracting costs. We also show that mixed payments are not merely hybrids between cash and stock payments, but have unique determinants and features.
•The mixed payment fraction tripled from 10% to 30% around the turn of the century.•The faction of stock payments peaked in the late 1990s but has since plunged.•The fraction of cash payments bottomed out in the late 1990s but has since surged.•Variables linked to traditional theories explain a portion of these trends.•Mixed payments have unique determinants and features.
Details
- Title: Subtitle
- Time trends and determinants of the method of payment in M&As
- Creators
- Audra L. Boone - Texas A&M UniversityErik Lie - University of IowaYixin Liu - University of New Hampshire
- Resource Type
- Journal article
- Publication Details
- Journal of corporate finance (Amsterdam, Netherlands), Vol.27, pp.296-304
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.jcorpfin.2014.05.015
- ISSN
- 0929-1199
- eISSN
- 1872-6313
- Language
- English
- Date published
- 08/01/2014
- Academic Unit
- Finance
- Record Identifier
- 9984380549702771
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