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Corporate Control Contests and Capital Structure, Journal of Financial Economics

Abstract

This paper explores the determinants of corporate takeover methods (proxy fights versus tender offers) and their outcomes and price effects. We focus on the effect of leverage on the takeover method and outcome. The model predicts, for example, that the target's stock price appreciates less following a successful proxy contest than in a successful tender offer. In addition, we obtain several other results on price effects and on the capital structure changes that accompany contests for corporate control. Some of our results are compared with the existing empirical evidence.

Type

Article

Author(s)

Milton Harris, Artur Raviv

Date Published

1988

Citations

Harris, Milton, and Artur Raviv. 1988. Corporate Control Contests and Capital Structure. Journal of Financial Economics. 20(1-2): 55-86.

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