Initial Offer Precision and M&A Outcomes | Zendy

Hukkanen Petri | Zendy; Keloharju Matti | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Premium

Initial Offer Precision and M&A Outcomes

Author(s) -

Hukkanen Petri,

Keloharju Matti

Publication year - 2018

Publication title -

financial management

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.647

H-Index - 68

eISSN - 1755-053X

pISSN - 0046-3892

DOI - 10.1111/fima.12229

Subject(s) - liberian dollar , cash , quarter (canadian coin) , economics , business , actuarial science , econometrics , finance , history , archaeology

Building on recent research in social psychology, this paper analyzes the link between the precision of initial cash offers and mergers and acquisition (M&A) outcomes. About one‐half of the offers are made at the precision of one or five dollars per share, while an additional one‐third are made at the precision of a half dollar or one quarter. The practice of making offers at round price‐per‐share levels is associated with a higher purchase price for target shares and a lower probability of deal completion.

This content is not available in your region!

Continue researching here.

Having issues? You can contact us here

Accelerating Research