Explain and discuss why the acquirer announcement return is higher (or less negative) in cash-for-stock mergers...
Explain and discuss why the acquirer announcement return is higher (or less negative) in cash-for-stock mergers than in stock-for-stock.
Homework Answers
The acquirer announcement return in cash for stock mergers is higher because in this the entire risk is with acquirer shareholder whereas in stock for stock the risk is shared with selling shareholders also. Moreover, cash for stock mergers is taxable whereas stock for stock is not taxable.
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Explain and discuss why the acquirer announcement return is
higher (or less negative) in cash-for-stock mergers...
A firm has positive free cash flow and a net dividend to shareholders that is less...
A firm has positive free cash flow and a net dividend to shareholders that is less than free cash flow. What must it do with the surplus of the free cash flow over the dividend? Explain why it is common that firms with higher return on net operating assets (RONA) also have negative free cash flows. Also, explain why such firms tend to have above-average forward P/E ratio. P/B ratio is often said to indicate...
Explain why the samples with larger amounts of solute precipitated at significantly higher temperatures than those...
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2. We know that the announcement of a dividend increase causes a favorable stock price reaction....
2. We know that the announcement of a dividend increase causes a favorable stock price reaction. Today, Home Depot announces that it will increase the annual amount of its regular dividend by an additional $.15 per share (beginning with the next dividend to be paid next month). By how much would you expect the stock price to increase - more than $.15, less than $.15, or exactly $.15 per share? Briefly explain. Use no more than 50 words.
Inferior goods have negative income elasticities, such that when income is higher you actually consume less...
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d. announced its annual earnings on day 0, which was higher than the analyst- casted earnings....
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Do temporary negative supply shocks place policymakers in a predicament? Explain why. Discuss the dilemma they...
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2. We know that the announcement of a dividend increase causes a favorable stock price reaction. Today, Home Depot announces that it will increase the annual amount of its regular dividend by an additional $.15 per share (beginning with the next dividend to be paid next month). By how much would you expect the stock price to increase - more than $.15, less than $.15, or exactly $.15 per share? Briefly explain. Use no more than 50 words.
d. announced its annual earnings on day 0, which was higher than the analyst- casted earnings. The total abnormal return of ABC Ltd. over the 5-day window (-2, +2) urrounding the earnings announcement was positive. In the absence of any new firm-specific normation following the earnings announcement, a negative total abnormal return to ABC was observed over the period of day +3 to +60. Required: Explain whether this time pattern of abnormal return is consistent with market efficiency. If not,...
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