Relative reference prices and M&A misvaluations
Abstract
Purpose The purpose of this paper is to examine the misvaluation hypothesis using a relative reference point (RRP) in mergers and acquisitions (M&A) market. Design/methodology/approach The paper studies 1,878 M&A deals in the US market announced between January 1985 and December 2014. Findings The paper finds that bidders prefer stock payments when the RRP increases. The RRP is positively related to the offer premium and the target...
Paper Details
Title
Relative reference prices and M&A misvaluations
Published Date
Jun 5, 2019
Journal
Volume
11
Issue
1
Pages
70 - 97
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