Leverage adjustment after mergers and acquisitions

Leverage adjustment after mergers and acquisitions

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...

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Veröffentlicht in:Accounting and finance (Parkville) 2017-04, Vol.57 (S1), p.185-210
Hauptverfasser: Khoo, Joye, Durand, Robert B., Rath, Subhrendu
Format: Artikel
Sprache:eng
Schlagworte:
Acquisitions
Acquisitions & mergers
Capital structure
Leverage
Target leverage
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Beschreibung
Zusammenfassung: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.
ISSN:0810-5391
1467-629X
DOI:10.1111/acfi.12148