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Full-Text Articles in Business
The Mitigation Of Asymmetric Information Through The Use Of Earnouts, David Robert Beard
The Mitigation Of Asymmetric Information Through The Use Of Earnouts, David Robert Beard
LSU Doctoral Dissertations
We examine the use of a contracting method in mergers and acquisitions known as an earnout. In this type of transaction, the bidder agrees to pay the target an initial amount for the acquisition plus future payments contingent on the achievement of performance milestones. Theory suggests that the contingent payment associated with earnouts should reduce adverse selection problems facing both parties in the merger. The purpose of this dissertation is to study the ability of earnouts to mitigate problems associated with asymmetric information and problem of agency. Specifically, we answer the following questions in analyzing these transactions. First, empirical evidence …
The Interrelations Between Investor Beliefs, Information And Market Liquidity, Stephanie Yates Rauterkus
The Interrelations Between Investor Beliefs, Information And Market Liquidity, Stephanie Yates Rauterkus
LSU Doctoral Dissertations
I use two datasets to test the relation between trading volume, the heterogeneity of beliefs and the heterogeneity of belief revisions. The first dataset allows me to construct two groups that proxy for ‘holders’ and ‘non-holders’ of a traded asset. This construct allows me to test the relation between changes in trading volume and changes in the dispersion of beliefs both within and across these two groups. I examine changes in within- and across-group dispersion separately and simultaneously. The second dataset allows me to examine belief revisions more closely by analyzing only those prior and posterior beliefs surrounding an information …