This paper embeds an oligopolistic industry structure in a real options framework in which synergy gains of horizontal mergers arise endogenously and vary stochastically over time. We find that (i) mergers are more likely in more concentrated industries; (ii) mergers are more likely in...

This paper embeds an oligopolistic industry structure in a real options framework in which synergy gains of horizontal mergers a rise endogenouslya nd vary stochastically over time. We find that(i) mergers are more likely in more concentrated industries; (ii) mergers are more likely inindustries...

Contingent future payments have gained a solid reputation as fundamental ingredients of business acquisition transactions. Earn-outs specifically are a species of contingent future payments that have proved helpful in a plethora of recent merger deals. An earn-out is payment for performance...

In this paper a joint capital asset pricing model and option pricing model is considered and applied to the derivation of an equity's value and its systematic risk. We first analyze the propreties of the two models and present some newly found properties of the option pricing model. We then...

Co-operative banks are widely seen as sustainable alternatives to profit-driven banking. However, while most banks struggle to meet the stringent capital requirements of regulators, co-operative banks are in particular need of cautious capital-related decisions given their little ability to...

This paper analyzes the interaction between financial leverage and takeover activity. We develop a dynamic model of takeovers in which the financing strategies of bidding firms and the timing and terms of takeovers are jointly determined. In the paper, capital structure plays the role of a...

This paper analyzes the interaction between financial leverage and takeover activity. We develop a dynamic model of takeovers in which the financing strategies of bidding firms and the timing and terms of takeovers are jointly determined. In the paper, capital structure plays the role of a...