Abstract
Building on recent research in social psychology, this paper analyzes the link between the precision of initial cash offers and mergers and acquisition (M&A) outcomes. About one-half of the offers are made at the precision of one or five dollars per share, while an additional one-third are made at the precision of a half dollar or one quarter. The practice of making offers at round price-per-share levels is associated with a higher purchase price for target shares and a lower probability of deal completion.
Original language | English |
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Pages (from-to) | 291-310 |
Number of pages | 20 |
Journal | Financial Management |
Volume | 48 |
Issue number | 1 |
Early online date | 10 Jul 2018 |
DOIs | |
Publication status | Published - 1 Mar 2019 |
MoE publication type | A1 Journal article-refereed |