Leverage adjustment after mergers and acquisitions
Abstract
© 2015 AFAANZ. Australian firms have leverage targets. Speeds of adjustment to a target capital structure are higher than previously published estimates when there are major disruptions to firms' leverage ratios. Firms exploit company-specific characteristics to achieve these targets. Profitability and cash levels are important drivers of the speeds of adjustment. Firms, which have lower profitability or higher cash levels, appear to adjust faster.
Citation
Khoo, J. and Durand, R. and Rath, S. 2015. Leverage adjustment after mergers and acquisitions. Accounting and Finance.
Source Title
Accounting and Finance
ISSN
School
School of Economics and Finance
Collection
Related items
Showing items related by title, author, creator and subject.
-
Xu, Yan (2009)Current research on corporate cash holdings is set within the contemporary corporate cash-holding conceptual framework established by Opler et al. (1999), which consist of the static trade-off theory, the pecking-order ...
-
Khoo, Joye (2013)I undertake an empirical investigation of leverage adjustment behaviour by examining Australian firms whose structure is disrupted through merger and acquisition activity. The analysis confirms that firms find themselves ...
-
Bhattacharya, M.; Bloch, Harry (2000)Studies of industry profitability generally deal with long-run equilibrium models, making no allowance for slow adjustment to equilibrium. In this study, a cross-sectional analysis is carried out against a sample of ...