Methods of Payment in Asset Sales : Contracting with Equity Versus Cash  

Oleh:

Slovin, Myron B. ; Polonchek, John A. ; Sushka, Marie E.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 60 no. 5 (Oct. 2005), page 2385-2408.
Topik: SALES; studies; asset management; equity financing; comparative analysis; rates of return; cash payments
Fulltext: p 2385.pdf (112.38KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We analyze intercorporate asset sales where equity is the means of payment and compare the results to cash asset sales. Equity deals are value - enhancing for both buyers, 10% and sellers 3% while cash sales generate seller returns of 1,9% and buyer returns that are not significant. Combined wealth gains are large for equity deals, but modest for cash deals. Equity - based asset sales are not a precursor to consolidations between buyers and sellers, and do not affect buyer oppennes to the takeover market. We conclude that the use of buyer equity conveys favorable information about the value of assets and buyers.

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