Does market misvaluation drive post-acquisition underperformance in stock deals?

研究成果: Article

13 引文 斯高帕斯(Scopus)

摘要

There is limited direct evidence on the impact of market misvaluation on acquirer long run performance. In this paper, we hypothesize that stock prices of stock-financed acquirers would move toward their fundamental value in the long run, thus correcting the initial overvaluation. Empirical results show that more overvalued acquirers are associated with poorer post-acquisition abnormal returns. We eliminate the concern that our findings are due to either overpayment or overvaluation-driven bad acquisitions. Our results are robust to controlling for market-wide valuation, alternative methods and assumptions used to calculate abnormal returns and fundamental value, and other factors affecting acquirer returns.

原文English
頁(從 - 到)690-706
頁數17
期刊International Review of Economics and Finance
20
發行號4
DOIs
出版狀態Published - 2011 十月 1

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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