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Does Investor Misvaluation Drive the Takeover Market?
- Source :
- Journal of Finance (Wiley-Blackwell); Apr2006, Vol. 61 Issue 2, p725-762, 38p, 6 Charts
- Publication Year :
- 2006
-
Abstract
- This paper uses pre-offer market valuations to evaluate the misvaluation and Q theories of takeovers. Bidder and target valuations (price-to-book, or price-to-residual-income-model-value) are related to means of payment, mode of acquisition, premia, target hostility, offer success, and bidder and target announcement-period returns. The evidence is broadly consistent with both hypotheses. The evidence for the Q hypothesis is stronger in the pre-1990 period than in the 1990--2000 period, whereas the evidence for the misvaluation hypothesis is stronger in the 1990--2000 period than in the pre-1990 period. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00221082
- Volume :
- 61
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Finance (Wiley-Blackwell)
- Publication Type :
- Academic Journal
- Accession number :
- 20043159
- Full Text :
- https://doi.org/10.1111/j.1540-6261.2006.00853.x