Open AccessCorporate Takeovers And Interest Rates
Author(s) -
Omesh Kini,
William A. Kracaw,
John J. McConnell
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.v7i3.6228
Subject(s) - volatility (finance) , interest rate , monetary economics , business , cash , economics , cash flow , financial system , accounting , finance
This study analyzes the effect of corporate takeover announcements on the volatility of interest rate changes and on the level of interest rates over the period 1962 through 1984. The findings suggest that intercorporate takeovers increase the volatility of interest rate changes over this period. Because the increase in volatility is concentrated around the announcement of cash takeovers, the results imply that it is the mode of financing, rather than takeovers, per se, that is important of credit markets.