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Discussion of “Target's Tax Shelter Participation and Takeover Premiums”
Author(s) -
Shevlin Terry
Publication year - 2016
Publication title -
contemporary accounting research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.769
H-Index - 99
eISSN - 1911-3846
pISSN - 0823-9150
DOI - 10.1111/1911-3846.12227
Subject(s) - bidding , tax credit , exploit , accounting , tax reform , economics , business , public economics , political science , microeconomics , computer science , computer security
Chow, Klassen, and Liu ([Chow, T., 2016]), hereafter CKL , examine whether M&A bidding firms are willing to pay more for target firms that disclose they have not participated in a “tax shelter” sometime in the past. My discussion provides an overview of the past and current tax literature in accounting and places CKL within this expanding literature. I then provide a critique of this interesting and well‐executed study that exploits an unusual disclosure to examine tax shelter participation effects.