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Journal Article

Price Pressure Around Mergers

It has been well documented that when companies use stock as the currency in a takeover, the acquiring company’s share price tends to fall between –2% and –3% around the time a deal is announced.

Journal Article

The Value of Corporate Takeovers

This article summarizes the results of three studies of the value of corporate takeovers.

Journal Article

The Role of Financial Economics in Securities Fraud Cases

Modern financial economics is becoming increasingly influential in securities fraud law.

Book

Merger Arbitrage

How does one regulate systemic risk in the financial sector? We propose charging each financial firm a tax based on its expected loss during a systemic crisis.

Book

A Clinical Exploration of Value Creation and Destruction in Acquisitions

How and why is value created or destroyed in mergers and acquisitions? To answer these questions, we present analyses of two acquisitions: Cooper Industries’ acquisition of Cameron Iron Works in 1989 and Premark’s acquisition of Florida Tile in 1990.

Journal Article

Lessons From Financial Economics

There is disagreement among financial economists about the meaning of efficiency, how to test for it and what the results of these tests mean.

Journal Article

Shark Repellents and Managerial Myopia

Critics of hostile corporate takeovers frequently assert that takeover pressure forces managers to sacrifice profitable, but slow-yielding, long-term investments in favor of less-producting short-term investments that offer immediate returns.Evidence supporting takeover-induced short-sightedness, or myopia, is largely anecdotal, but a new economic model predicts that adopting measures to discourage takeovers — so-called shark repellent — will enable corporate managers to increase profitable long-term investments such as research and development (R&D).

Journal Article

Slow-Moving Capital

Unlike textbook arbitrageurs who instantaneously trade when prices deviate from fundamental values, real-world arbitrageurs must overcome various frictions.

Journal Article

New Evidence and Perspectives on Mergers

Empirical research has revealed a great deal about mergers and acquisitions trends and characteristics over the last century.

Journal Article

Characteristics of Risk and Return in Risk Arbitrage

After the announcement of a merger or acquisition, the target company’s stock typically trades at a discount to the price offered by the acquiring company.