Author : Chune Young Chung
Release : 2012
Genre :
Kind : eBook
Book Rating : 524/5 ( reviews)

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Book Synopsis Two Essays on Leverage, Mergers and Acquisitions, and Institutional Investors by : Chune Young Chung

Download or read book Two Essays on Leverage, Mergers and Acquisitions, and Institutional Investors written by Chune Young Chung. This book was released on 2012. Available in PDF, EPUB and Kindle. Book excerpt: In the first essay of my dissertation, I study how bidders' appetite for financial and operating (expected and unexpected) leverage of targets affects merger activities, and whether this appetite varies through the business cycle. I document evidence that bidders have a time-varying appetite for targets' leverages through the business cycle. The effect of financial and operating leverage on the likelihood of becoming a target of a takeover, likelihood of becoming an acquirer, the takeover premium, the announcement CARs of bidders, and long-run BHARs of bidders all depend on the business cycle. The time-varying effects of leverage on merger decisions are consistent with the time-varying benefits of financial and operating leverage, and uniquely capture the well-known time-varying risk in corporate investments.