The Effect Of Founder Ceo Overconfidence On Merger Premium

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The Effect of Founder-CEO Overconfidence on Merger Premium

Author : Christoph Meyer
Publisher : GRIN Verlag
ISBN 13 : 3656957290
Total Pages : 91 pages
Book Rating : 4.6/5 (569 download)

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Book Synopsis The Effect of Founder-CEO Overconfidence on Merger Premium by : Christoph Meyer

Download or read book The Effect of Founder-CEO Overconfidence on Merger Premium written by Christoph Meyer and published by GRIN Verlag. This book was released on 2015-05-08 with total page 91 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2014 in the subject Business economics - Investment and Finance, grade: 1,0, Heriot-Watt University Edinburgh (Finance), course: Corporate Finance, language: English, abstract: Theoretical and empirical research has indicated that overconfidence affects merger decision-making and merger premium. However, founder-CEOs have not been subject of such a study, yet. This lack is particular surprising when considering the differences between founder and manager-CEOs as well as the media attention of founder-CEOs. The present dissertation aims to fill the research gap through investigating the effect of founder-CEO overconfidence on merger premium in the high-tech industry. Moreover, this dissertation aims to extend the literature by including target CEO overconfidence and studying the impact on merger premium when both, acquirer and target CEO are overconfident. By studying founder-CEOs this dissertation also aims to establish the effectiveness of founders as CEOs. The resource-based perspective argues that while founders help in the early years of the company, they become less effective as the firm evolves, since they lack the necessary management skills. Design/methodology/approach – Using ordinary least square (OLS) technique, this study investigates the effects of implemented factors in determining the merger premium paid in high-tech acquisitions. A sample consisting of 245 acquisitions in the high-tech industry of 124 CEOs during a 19-year period (1995 to 2013) has been observed. In order to test the founder-CEO effects, this dissertation develops a matched sample approach of 62 founder-CEOs and 62 manager-CEOs. This study shows a strong relationship between CEO overconfidence and acquisitions premium paid. The results suggest that the CEO overconfidence may provide an explanation for the well-rehearsed overpayment problem. An additional analysis indicates that the highest premium is paid when combined acquiring and tar-get firm CEO overconfidence exist. The dissertation also shows that founder-CEOs pay higher premia than manager-CEOs in the high-tech industry. It has been proven that founder-CEOs’ decisions are more independent from interventions of the board of directors and that founder-CEO overpayment is not dependent on the company’s size or relatedness of mergers. The findings are reliable as the results remain constant for applied robustness tests.

Impact of CEO Overconfidence on Mergers & Acquisitions During Economic Recession

Author : 張暘亘
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (11 download)

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Book Synopsis Impact of CEO Overconfidence on Mergers & Acquisitions During Economic Recession by : 張暘亘

Download or read book Impact of CEO Overconfidence on Mergers & Acquisitions During Economic Recession written by 張暘亘 and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Overconfidence and Bondholder Wealth Effects

Author : 聶瑋瑩
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (11 download)

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Book Synopsis CEO Overconfidence and Bondholder Wealth Effects by : 聶瑋瑩

Download or read book CEO Overconfidence and Bondholder Wealth Effects written by 聶瑋瑩 and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Overconfidence and International Merger and Acquisition Activity

Author : Stephen P. Ferris
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis CEO Overconfidence and International Merger and Acquisition Activity by : Stephen P. Ferris

Download or read book CEO Overconfidence and International Merger and Acquisition Activity written by Stephen P. Ferris and published by . This book was released on 2015 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the role that CEO overconfidence plays in an explanation of international mergers and acquisitions during the period 2000-2006. Using a sample of CEOs of Fortune Global 500 firms over our sample period, we find that CEO overconfidence is related to a number of critical aspects of international merger activity. Overconfidence helps to explain the number of offers made by a CEO, the frequency of diversifying acquisitions, and the use of cash to finance a merger deal. Although overconfidence is an international phenomenon, it is most extensively observed in individuals heading firms headquartered in Christian countries that encourage individualism while de-emphasizing long-term orientation in their national cultures.

Do Acquirer CEO Incentives Impact Mergers?

Author : David Becher
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Do Acquirer CEO Incentives Impact Mergers? by : David Becher

Download or read book Do Acquirer CEO Incentives Impact Mergers? written by David Becher and published by . This book was released on 2014 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the mechanisms by which acquirer CEOs are incentivized and their impact on merger decisions. We argue that the pre-merger structure of CEO wealth impacts a CEO's risk tolerance and ultimately her willingness to undertake a merger as well as the framework of the deal. As the riskiness of CEO wealth increases (as measured by excess vega or cumulative option-based wealth), firms are more likely to become an acquirer, pay higher premiums, and experience lower post-merger performance. These results hold controlling for CEO overconfidence and cannot be attributed to firms altering incentives to induce CEOs to partake in mergers. Post financial crisis, we find both a shift in the composition of CEO pay and its relation to mergers. Overall, these results have important policy implications in the debate over optimal CEO pay as the structure by which CEOs are compensated appears to impact firm choices.

The Industry Shock and Market Misvaluation Hypotheses of Merger Waves, Bidder CEO Overconfidence and CEO Turnover

Author : Sugiharto
Publisher :
ISBN 13 :
Total Pages : 208 pages
Book Rating : 4.:/5 (93 download)

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Book Synopsis The Industry Shock and Market Misvaluation Hypotheses of Merger Waves, Bidder CEO Overconfidence and CEO Turnover by : Sugiharto

Download or read book The Industry Shock and Market Misvaluation Hypotheses of Merger Waves, Bidder CEO Overconfidence and CEO Turnover written by Sugiharto and published by . This book was released on 2012 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: [Truncated abstract] This study is conducted in order to validate Harford s (2005) research methodology in testing the existence of merger waves and also to re-examine whether merger waves can be explained by the neoclassical hypothesis and/or the behavioural hypothesis. It is alleged that merger waves identified using Harford's methodology could be affected by the samples selected. A sample of merger from the period of 1991 to 2000 which consists of successful and unsuccessful M&As are tested and 28 merger waves are identified from the sample. Twenty of these waves are identical to those found by Harford but thirteen starting dates of the waves differ from those of Harford. In addition, unlike Harford, this study finds that not only the abnormally high changes but also the abnormally low changes in the variables related to the neoclassical hypothesis drive the merger waves. The most consistent finding between this and Harford's study is that the observable economic shocks are more likely to lead to industry merger waves and those merger waves cluster when capital liquidity is relatively high. This study also examines whether the premiums paid to target firms and the bidders' post merger operating performance are affected by bidder CEO behaviour, period of merger, method of payment, industry of merged firms, capital liquidity, and pre-merger operating performance. To conclude, this study finally investigates whether all of these variables play a significant role on the likelihood of bidder CEO turnovers. Testing the US successful M&A data from the period of the 1990s, this study finds that CEOs pay high merger premiums for mergers that are undertaken during merger waves and in the year of high capital liquidity. These suggest that bidders pay high premiums for in-wave mergers when they have better access to economical source of fund to accommodate the reallocation of assets...

Who Makes Acquisitions? CEO Overconfidence and the Market's Reaction

Author : Ulrike Malmendier
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Who Makes Acquisitions? CEO Overconfidence and the Market's Reaction by : Ulrike Malmendier

Download or read book Who Makes Acquisitions? CEO Overconfidence and the Market's Reaction written by Ulrike Malmendier and published by . This book was released on 2010 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Overconfident CEOs over-estimate their ability to generate returns. Thus, on the margin, they undertake mergers that destroy value. They also perceive outside finance to be over-priced. We classify CEOs as overconfident when, despite their under-diversification, they hold options on company stock until expiration. We find that these CEOs are more acquisitive on average, particularly via diversifying deals. The effects are largest in firms with abundant cash and untapped debt capacity. Using press coverage as quot;confidentquot; or quot;optimisticquot; to measure overconfidence confirms these results. We also find that the market reacts significantly more negatively to takeover bids by overconfident managers.

Advances in Mergers and Acquisitions

Author : Sydney Finkelstein
Publisher : Emerald Group Publishing
ISBN 13 : 1800717237
Total Pages : 167 pages
Book Rating : 4.8/5 (7 download)

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Book Synopsis Advances in Mergers and Acquisitions by : Sydney Finkelstein

Download or read book Advances in Mergers and Acquisitions written by Sydney Finkelstein and published by Emerald Group Publishing. This book was released on 2022-09-14 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Mergers and Acquisitions stands out from the competition due to its focus on three key characteristics: studies from scholars in different countries, with different research questions, relying on different theoretical perspective.

Mergers, Acquisitions, and Corporate Restructurings

Author : Patrick A. Gaughan
Publisher : John Wiley & Sons
ISBN 13 : 1119380731
Total Pages : 819 pages
Book Rating : 4.1/5 (193 download)

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Book Synopsis Mergers, Acquisitions, and Corporate Restructurings by : Patrick A. Gaughan

Download or read book Mergers, Acquisitions, and Corporate Restructurings written by Patrick A. Gaughan and published by John Wiley & Sons. This book was released on 2017-11-27 with total page 819 pages. Available in PDF, EPUB and Kindle. Book excerpt: The essential M&A primer, updated with the latest research and statistics Mergers, Acquisitions, and Corporate Restructurings provides a comprehensive look at the field's growth and development, and places M&As in realistic context amidst changing trends, legislation, and global perspectives. All-inclusive coverage merges expert discussion with extensive graphs, research, and case studies to show how M&As can be used successfully, how each form works, and how they are governed by the laws of major countries. Strategies and motives are carefully analyzed alongside legalities each step of the way, and specific techniques are dissected to provide deep insight into real-world operations. This new seventh edition has been revised to improve clarity and approachability, and features the latest research and data to provide the most accurate assessment of the current M&A landscape. Ancillary materials include PowerPoint slides, a sample syllabus, and a test bank to facilitate training and streamline comprehension. As the global economy slows, merger and acquisition activity is expected to increase. This book provides an M&A primer for business executives and financial managers seeking a deeper understanding of how corporate restructuring can work for their companies. Understand the many forms of M&As, and the laws that govern them Learn the offensive and defensive techniques used during hostile acquisitions Delve into the strategies and motives that inspire M&As Access the latest data, research, and case studies on private equity, ethics, corporate governance, and more From large megadeals to various forms of downsizing, a full range of restructuring practices are currently being used to revitalize and supercharge companies around the world. Mergers, Acquisitions, and Corporate Restructurings is an essential resource for executives needing to quickly get up to date to plan their own company's next moves.

Behavioral Corporate Finance

Author : Hersh Shefrin
Publisher : College Ie Overruns
ISBN 13 : 9781259254864
Total Pages : 300 pages
Book Rating : 4.2/5 (548 download)

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Book Synopsis Behavioral Corporate Finance by : Hersh Shefrin

Download or read book Behavioral Corporate Finance written by Hersh Shefrin and published by College Ie Overruns. This book was released on 2017-04-16 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Applied Mergers and Acquisitions

Author : Robert F. Bruner
Publisher : John Wiley & Sons
ISBN 13 : 1118436393
Total Pages : 1056 pages
Book Rating : 4.1/5 (184 download)

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Book Synopsis Applied Mergers and Acquisitions by : Robert F. Bruner

Download or read book Applied Mergers and Acquisitions written by Robert F. Bruner and published by John Wiley & Sons. This book was released on 2016-02-08 with total page 1056 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to the world of mergers and acquisitions Why do so many M&A transactions fail? And what drives the success of those deals that are consummated? Robert Bruner explains that M&A can be understood as a response by managers to forces of turbulence in their environment. Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigor in the development of their M&A deals. By addressing the key factors of M&A success and failure, Applied Mergers and Acquisitions can help readers do this. Written by one of the foremost thinkers and educators in the field, this invaluable resource teaches readers the art and science of M&A valuation, deal negotiation, and bargaining, and provides a framework for considering tradeoffs in an effort to optimize the value of any M&A deal.

Applied Corporate Finance

Author : Aswath Damodaran
Publisher : John Wiley & Sons
ISBN 13 : 1118808932
Total Pages : 663 pages
Book Rating : 4.1/5 (188 download)

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Book Synopsis Applied Corporate Finance by : Aswath Damodaran

Download or read book Applied Corporate Finance written by Aswath Damodaran and published by John Wiley & Sons. This book was released on 2014-10-27 with total page 663 pages. Available in PDF, EPUB and Kindle. Book excerpt: Aswath Damodaran, distinguished author, Professor of Finance, and David Margolis, Teaching Fellow at the NYU Stern School of Business, has delivered the newest edition of Applied Corporate Finance. This readable text provides the practical advice students and practitioners need rather than a sole concentration on debate theory, assumptions, or models. Like no other text of its kind, Applied Corporate Finance, 4th Edition applies corporate finance to real companies. It now contains six real-world core companies to study and follow. Business decisions are classified for students into three groups: investment, financing, and dividend decisions.

Egonomics

Author : Dave Marcum
Publisher : Simon and Schuster
ISBN 13 : 1847375049
Total Pages : 333 pages
Book Rating : 4.8/5 (473 download)

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Book Synopsis Egonomics by : Dave Marcum

Download or read book Egonomics written by Dave Marcum and published by Simon and Schuster. This book was released on 2008-09-04 with total page 333 pages. Available in PDF, EPUB and Kindle. Book excerpt: Backed by five years of research, David Marcum and Steven Smith's egonomicsinforms readers that the key to great leadership is understanding exactly what ego is - and what it should not be. With the aid of real-life examples and persuasive writing, egonomics argues that while most people believe ego is negative, it is actually a healthy, necessary element to management effectiveness and business leadership. Marcum and Smith illustrate that the distinction between a good and a great leader is how humility affects their ambition, and egonomics is full of ideas that help both upper and middle management keep their egos in balance. With a compelling combination of business and psychology expertise, these two specialists explain how (a) being too competitive can make you less competitive, (b) seeking respect and recognition dilutes effectiveness and (c) humility, curiosity and veracity are the essential components to outstanding leadership. Full of the best advice from the experts in the field, egonomics is poised to be the blockbuster business bestseller of the season.

The Handbook of the Economics of Corporate Governance

Author : Benjamin Hermalin
Publisher : Elsevier
ISBN 13 : 0444635408
Total Pages : 762 pages
Book Rating : 4.4/5 (446 download)

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Book Synopsis The Handbook of the Economics of Corporate Governance by : Benjamin Hermalin

Download or read book The Handbook of the Economics of Corporate Governance written by Benjamin Hermalin and published by Elsevier. This book was released on 2017-09-18 with total page 762 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. Concentrates on underlying principles that change little, even as the empirical literature moves on Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field’s substantive findings, all of which help point the way forward

The Financial Crisis Inquiry Report

Author : Financial Crisis Inquiry Commission
Publisher : Cosimo, Inc.
ISBN 13 : 1616405414
Total Pages : 692 pages
Book Rating : 4.6/5 (164 download)

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Book Synopsis The Financial Crisis Inquiry Report by : Financial Crisis Inquiry Commission

Download or read book The Financial Crisis Inquiry Report written by Financial Crisis Inquiry Commission and published by Cosimo, Inc.. This book was released on 2011-05-01 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.

Handbook of Corporate Finance

Author : Bjørn Espen Eckbo
Publisher : Elsevier
ISBN 13 : 0080488919
Total Pages : 559 pages
Book Rating : 4.0/5 (84 download)

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Book Synopsis Handbook of Corporate Finance by : Bjørn Espen Eckbo

Download or read book Handbook of Corporate Finance written by Bjørn Espen Eckbo and published by Elsevier. This book was released on 2007-05-21 with total page 559 pages. Available in PDF, EPUB and Kindle. Book excerpt: Judging by the sheer number of papers reviewed in this Handbook, the empirical analysis of firms’ financing and investment decisions—empirical corporate finance—has become a dominant field in financial economics. The growing interest in everything “corporate is fueled by a healthy combination of fundamental theoretical developments and recent widespread access to large transactional data bases. A less scientific—but nevertheless important—source of inspiration is a growing awareness of the important social implications of corporate behavior and governance. This Handbook takes stock of the main empirical findings to date across an unprecedented spectrum of corporate finance issues, ranging from econometric methodology, to raising capital and capital structure choice, and to managerial incentives and corporate investment behavior. The surveys are written by leading empirical researchers that remain active in their respective areas of interest. With few exceptions, the writing style makes the chapters accessible to industry practitioners. For doctoral students and seasoned academics, the surveys offer dense roadmaps into the empirical research landscape and provide suggestions for future work. *The Handbooks in Finance series offers a broad group of outstanding volumes in various areas of finance *Each individual volume in the series should present an accurate self-contained survey of a sub-field of finance *The series is international in scope with contributions from field leaders the world over

The Founder's Dilemmas

Author : Noam Wasserman
Publisher : Princeton University Press
ISBN 13 : 0691158304
Total Pages : 490 pages
Book Rating : 4.6/5 (911 download)

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Book Synopsis The Founder's Dilemmas by : Noam Wasserman

Download or read book The Founder's Dilemmas written by Noam Wasserman and published by Princeton University Press. This book was released on 2013-04 with total page 490 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Founder's Dilemmas examines how early decisions by entrepreneurs can make or break a startup and its team. Drawing on a decade of research, including quantitative data on almost ten thousand founders as well as inside stories of founders like Evan Williams of Twitter and Tim Westergren of Pandora, Noam Wasserman reveals the common pitfalls founders face and how to avoid them.