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Information Asymmetries and Investment Banking in Mergers & Acquisitions (Europäische Hochschulschriften / European University Studies / Publicati

Information Asymmetries and Investment Banking in Mergers & Acquisitions (Europäische Hochschulschriften / European University Studies / Publicati

ISBN: 9783631563106
Publisher: Peter Lang GmbH, Internationaler Verlag der Wissenschaften
Publication Date: 2007-04-19
Number of pages: 195
Any used item that originally included an accessory such as an access code, one time use worksheet, cd or dvd, or other one time use accessories may not be guaranteed to be included or valid. By purchasing this item you acknowledge the above statement.
$83.05

This book examines information asymmetries in mergers and acquisitions, specifically focusing on the role of the investment banker. When capital markets are imperfect, the investment banker may add value as an intermediary by reducing transaction costs and mitigating information asymmetries. Here, a theoretical model is developed, which shows that the investment banker is able to reduce the degree of hidden information between seller and buyer. The model indicates that the investment banker will recommend a specific buyer, taking the nature of the buyer, expected synergy benefits, and the acquisition probability into account. Based on that recommendation, the selling company can obtain maximum value by selling to the highest bidder.

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