This paper tests Leland's (2007) theoretical prediction that depending on specific merger conditions, corporate coinsurance can generate either synergistic gains accruing to both creditors and equityholders or a wealth transfer from stockholders to bondholders. We observe that in merger deals of...

We predict the change in equity value due to corporate coinsurance in mergers and test whether conglomerate mergers produce higher coinsurance gains to shareholders than horizontal mergers. Conglomerate mergers have higher bidder, target, and size-weighted average marginal tax rates than...

We find that classified board in the M&A target firm is positively related to the target shareholder value, but only for firms with both intensive R&D investment and strong external governance. We also find that firms with classified board exhibit superior quality innovation when they have both...