Financial distress and corporate acquisitions: further empirical evidence

Article Abstract:

Most companies choose to acquire financially-distressed firms with sales generating ability. Using the sequential response logit model, the ratio of sales to total assets was found to have the greatest influence in decisions to acquire distressed firms. Other factors that induce acquisition include inefficient management, proportion of productive assets to total assets and return on productive assets. However, acquiring firms tend to avoid buying distressed companies with insider trading or financial leverage.

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Relationship between volatility and expected returns across international stock markets

Article Abstract:

The relationship between stock market volatility and expected returns are examined for Australia, Belgium, Canada, France, Italy, Japan, Switzerland, the UK, the US and West Germany. A generalized autoregressive conditional heteroskedasticity in the mean model is applied to test the industrialized countries' linear, square root and log-linear specifications. Substantial conditional heteroskedasticity indicated volatility clustering in the ten markets.

Research, Usage, Stock-exchange, Stock exchanges, Industrialized countries, Securities, Industrial nations, Autoregression (Statistics)

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Takeover premiums and anticipated merger gains in the US market for corporate control

Article Abstract:

Acquiring companies are likely to merge with target firms having potential step-ups and high liquidity. The tax benefits offered by step-ups and high liquidity enhance a firm's attractiveness as a target. However, high leverage has been found to reduce the likelihood of acquisition of target firms. Investigation of the target's return on equity and its tax carryover variables yield mixed results.

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