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Stock Performance and Acquisition Payment Methods

Bhiladvala, Simon LU and Dalaei, Roxana LU (2024) NEKH02 20232
Department of Economics
Abstract
This thesis examines the influence of payment methods on bidder stock returns during acquisitions in the tumultuous United Kingdom market conditions from 2018 to 2022, specifically whether the choice between cash or stock payments yields any different cumulative abnormal returns for the acquirers. Additionally, this thesis investigates whether the financial industry deviates from other sectors in the
country. The chosen methodology for this thesis is an event study, examining the short-term cumulative abnormal returns around the announcement day for the acquisitions. The findings follow from previous research, with insignificant values indicating that the choice of payment method does not result in superior abnormal results. However,... (More)
This thesis examines the influence of payment methods on bidder stock returns during acquisitions in the tumultuous United Kingdom market conditions from 2018 to 2022, specifically whether the choice between cash or stock payments yields any different cumulative abnormal returns for the acquirers. Additionally, this thesis investigates whether the financial industry deviates from other sectors in the
country. The chosen methodology for this thesis is an event study, examining the short-term cumulative abnormal returns around the announcement day for the acquisitions. The findings follow from previous research, with insignificant values indicating that the choice of payment method does not result in superior abnormal results. However, there is a subtle suggestion of improved outcomes when opting for cash transactions. Furthermore, the financial industry did not perform well during the study period and underperformed the rest of the industries, as market reactions were much better in other sectors. (Less)
Please use this url to cite or link to this publication:
author
Bhiladvala, Simon LU and Dalaei, Roxana LU
supervisor
organization
course
NEKH02 20232
year
type
M2 - Bachelor Degree
subject
keywords
acquisitions, event study, payment method
language
English
id
9148377
date added to LUP
2024-04-16 09:26:12
date last changed
2024-04-16 09:26:12
@misc{9148377,
  abstract     = {{This thesis examines the influence of payment methods on bidder stock returns during acquisitions in the tumultuous United Kingdom market conditions from 2018 to 2022, specifically whether the choice between cash or stock payments yields any different cumulative abnormal returns for the acquirers. Additionally, this thesis investigates whether the financial industry deviates from other sectors in the
country. The chosen methodology for this thesis is an event study, examining the short-term cumulative abnormal returns around the announcement day for the acquisitions. The findings follow from previous research, with insignificant values indicating that the choice of payment method does not result in superior abnormal results. However, there is a subtle suggestion of improved outcomes when opting for cash transactions. Furthermore, the financial industry did not perform well during the study period and underperformed the rest of the industries, as market reactions were much better in other sectors.}},
  author       = {{Bhiladvala, Simon and Dalaei, Roxana}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Stock Performance and Acquisition Payment Methods}},
  year         = {{2024}},
}