exert a large and persistent effect on the volatility of stock returns of acquirers and that this response is crucially …-level uncertainty is characterized by a pecking order: the announcement of a domestic takeover leads to a reduction in the uncertainty … - engender a positive response in acquirers' volatility. Our results suggest that acquisitions affect uncertainty because they …

variables used in the merger literature. As predicted by the model, a graph of the target firm's implied volatility against the …We study both theoretically and empirically option prices on firms undergoing a cash merger offer. To estimate the … merger's success probability, we use a Markov Chain Monte Carlo (MCMC) method using a state space representation of our model …