First prize to Farzad and Marcus
Jun. 07, 2017
Congratulations to Farzad Saidi, Assistant Professor, and Marcus Opp, joining Swedish House of Finance in August as Associate Professor, for being awarded the Jensen Prize for the best paper published in the Journal of Financial Economics in the areas of corporate finance and organizations for their paper 鈥漈arget revaluation after failed takeover attempts 鈥 cash versus stock鈥 written together with Ulrike Malmendier.
Farzad, Marcus, and Ulrike examine the informational effect of the bidder鈥檚 strategic decision to use cash versus stock on the target鈥檚 stock return. They find that targets of unsuccessful cash-financed takeover bids are revalued by + 15 percent after deal failure, whereas stock-financed targets return to pre-announcement levels. The results are consistent with cash bids revealing prior undervaluation of the target.