Purpose – This paper investigates the Jensen's free cash flow (FCF) hypothesis in the context of UK cash acquisitions. Under this hypothesis, financial slack induces mangers to acquire targets for cash if such behaviour generates either pecuniary or non-pecuniary rewards for them, giving rise...

We investigate the determinants of short term wealth effects for both public acquiring and target shareholders following the announcement of UK acquisitions over the period 1990–2005. Regardless of their nationality, overall acquirers incur losses, with domestic acquirers’ under-performing...

Purpose – This paper investigates the Jensen's free cash flow (FCF) hypothesis in the context of UK cash acquisitions. Under this hypothesis, financial slack induces mangers to acquire targets for cash if such behaviour generates either pecuniary or non-pecuniary rewards for them, giving rise...

In this paper, it is argued that previous estimates of the expected cost of equity and the expected arithmetic risk premium in the UK show a degree of upward bias. Given the importance of the risk premium in regulatory cost of capital in the UK, this has important policy implications. There are...

The significant impact of method of payment on the share price abnormal returns following mergers and acquisitions have been broadly considered and documented in US and UK empirical studies (Agrawal and Jaffe 2000). In the UK, all-cash acquisitions show insignificant negative or small positive...

This paper explores the industry cost of equity capital for the UK. We replicate the <link rid="b10">Fama and French (1997)</link> US analysis for UK industries, but additionally investigate the industry cost of equity capital obtained from a conditional CAPM, the <link rid="b3">Cahart (1997)</link> four factor model, and the <link rid="b1">Al-Horani,...

<heading id="h1" level="3" format="inline" implicit="no">Abstract: </heading>This paper conducts a UK test of a version of the <link rid="b45">Ohlson (1995)</link> model. We should only expect abnormal earnings to revert to zero if the book value of assets is economically meaningful. In this paper we make use of the property revaluations common in UK accounts, but estimate other...