Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286982 
Year of Publication: 
2021
Citation: 
[Journal:] Review of Managerial Science [ISSN:] 1863-6691 [Volume:] 16 [Issue:] 4 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2021 [Pages:] 933-967
Publisher: 
Springer, Berlin, Heidelberg
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.
Subjects: 
Mergers and acquisitions (M&A)
Choice of payment methods
Rational payment design
Equity overvaluation and misvaluation
Information asymmetry
JEL: 
G14
G50
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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