This study examines how relative differences in dividend policies affect the choice of payment method in mergers and acquisitions. Using the dividend clientele hypothesis, we hypothesize that, at the margin, the method of payment is more likely to be stock if the dividend policies of the two firms involved in a merger or acquisition are quite similar, but more likely to be cash if the dividend policies are much different. The empirical data support the relevance of the dividend clientele hypothesis for the method of payment in mergers and acquisitions. We also find some evidence that in stock-based deals a difference in dividend policies is negatively correlated with announcement returns.
JEL classification: G32, G34, G35
Keywords: Mergers and Acquisitions; Method of Payment; Dividend Clientele; Dividend Policies; Announcement Returns
학회소식
학회소식
[2010년 제 4차] Dividend Policy and the Method of Payment in Merger
작성자 : 관리자
조회수 : 809
게시일 :
2010-12-09