Open AccessDeterminants of The Medium Of Payment In Corporate Acquisitions
Author(s) -
Gregory Noronha,
Nilanjan Sen,
David M. Smith
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v11i1.5887
Subject(s) - free cash flow , payment , business , cash flow , logistic regression , cash , stock (firearms) , econometrics , actuarial science , monetary economics , economics , accounting , finance , statistics , mathematics , mechanical engineering , engineering
This study identifies factors that may be correlated with the bidders choice between offering cash versus stock in a corporate takeover. Results of a logistic regression analysis are generally consistent with information models involving the choice of payment type, as well as hypotheses related to the targets tax status. Support for Jensens (1986) free cash flow hypothesis also is found.