Determinants of the payment method in M&A deals
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Abstract
There are studies that analyze determinants of payment method in M&A Deals.
In our study we tend to analyze few of them. Our study intends to examine the
influence that the explanatory variables has, which is the determinant, on the
selection of method of payment, which is stock or cash either. Furthermore, we
proceeded in the exact calculation of this influence through the Average Marginal
Effects (AME) method. Our final sample consists of 389 Deals announced during an
eight year period between 01/01/2007 and 31/12/2014. Our sample include only
completed Deals, with public Status bidder from United States of America. Our
sample has no restrictions regarding the nation, the status and the industrial sector of
the target firm. Our findings indicates that the determinants having significance
influence on the payment of method are: Target Public Status, Collateral, Debt
Capacity and Market Run Up.