Working Paper No. 1157

Misvaluation and Financial Constraints: Method of Payment and Buyer Identity in Mergers & Acquisitions

Published: March 15, 2017Pages: 32Keywords: Mergers and acquisitions; Investments; Asymmetric information; Stock misvaluation; Financial frictionsJEL-codes: D82; G32; G34

Misvaluation and Financial Constraints: Method of Payment and Buyer Identity in Mergers & Acquisitions Aron Berg


The paper studies how stock price misvaluation and financial frictions affect whether an acquisition occurs between or within industries and whether the acquirer pays in cash or stocks. I set up a model where stock market misvaluation correlates within industries and across industries and assume that managers have private information regarding their own firm and firms similar to it. The model yields predictions regarding which firm acquires which firm, and the method of payment used in transactions.

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?

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