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Cambridge Business magazine: Optimism pays for stock-based acquisitions


‘Significantly positively biased’ earnings forecasts reduce bid premiums and boost chance of quick merger completion, finds study co-authored at Cambridge Judge. “We found that earnings forecasts by bidders positively affect perceptions of target shareholders, reducing bid premiums, but also positively influence the bidding firm’s own shareholders because the disclosure tends to attenuate the generally negative market reaction to stock-based acquisitions,” says co-author Amir Amel-Zadeh, University Lecturer in Finance at Cambridge Judge.

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