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We develop and test a model of debt structure and pricing in leveraged buyouts (LBOs). The model accounts for both market and firm specific variables and illustrates how collateral, security and seniority, as well as target future cash-flows and market interest rates determine the cost of...
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The present paper studies the impact of the SOX act to the choice of payment in Mergers & Acquisitions for firms with different capital structures. Use Probit and Tobit models to access the firms' pre-acquisition leverage levels as well as the leverage changes of firms because of the SOX act....
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We exploit cross-sectional variation in the predictable changes in asset volatility following corporate acquisitions to identify the effect of business risk on capital structure. We find that post-merger changes in leverage and cash holdings are strongly predicted by expected asset volatility...
Persistent link: https://www.econbiz.de/10012856772
This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers between lenders participated in the same syndicated loans as natural experiments that exogenously reduce the number of lenders and thus make renegotiation easier, I find that...
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In this paper, we investigate whether material asset reorganizations (MARs), a special form of merger and acquisition (M&A) transactions, can affect the acquirers' cost of debt financing. Further, we examine the effect of acquiring firms' accounting information quality on the cost of debt and on...
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