Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/183386 
Authors: 
Year of Publication: 
2017
Series/Report no.: 
IFN Working Paper No. 1157
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
The paper studies how stock price misvaluation and financial frictions affect whether an acquisition occurs between or within industries and whether the acquirer pays in cash or stocks. I set up a model where stock market misvaluation correlates within industries and across industries and assume that managers have private information regarding their own firm and firms similar to it. The model yields predictions regarding which firm acquires which firm, and the method of payment used in transactions.
Subjects: 
Mergers and acquisitions
Investments
Asymmetric information
Stock misvaluation
Financial frictions
JEL: 
D82
G32
G34
Document Type: 
Working Paper

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