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An Empirical Analysis of Changes in Financial Leverage Following Mergers of Australian Firms

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Abstract

This study analyzes the changes in financial leverage for the firms involved in merger and acquisitions in Australia during the period 1988 to 1996 and attempts to identify the reasons for changes in leverage. Consistent with previous studies, the present study also finds that the target firms' shareholders gain the highest in takeovers and that the combined firms financial leverage tend to increase after the merger. Further, the present study finds support for the argument that it is increased debt capacity that influences increased financial leverage.
Original languageEnglish
Title of host publication2005 AFAANZ Conference Proceedings
Place of PublicationMelbourne, Australia
PublisherAccounting and Finance Association of Australia and New Zealand (AFAANZ)
Pages1-19
ISBN (Print)0975697617
Publication statusPublished - 2005
EventAFAANZ 2005: Accounting and Finance Association of Australia and New Zealand 2005 Conference - Melbourne, Australia
Duration: 3 Jul 20055 Jul 2005

Conference

ConferenceAFAANZ 2005: Accounting and Finance Association of Australia and New Zealand 2005 Conference
CityMelbourne, Australia
Period3/07/055/07/05

Keywords

  • Finance

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