THE DETERMINANTS OF LEVERAGED BUYOUT ACTIVITY - FREE CASH FLOW VS FINANCIAL DISTRESS COSTS

• 成果类型: Note
• 署名作者: OPLER, T; TITMAN, S
• 署名单位: Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.2307/2329077
• 发表日期: 1993
• 页码: 1985-1999
• 关键词: management buyouts; capital structure; going private; EFFICIENCY

摘要

This paper investigates the determinants of leveraged buyout (LBO) activity by comparing firms that have implemented LBOs to those that have not. Consistent with the free cash flow theory, we find that firms that initiate LBOs can be characterized as having a combination of unfavorable investment opportunities (low Tobin's q) and relatively high cash flow. LBO firms also tend to be more diversified than firms which do not undertake LBOs. In addition, firms with high expected costs of financial distress (e.g., those with high research and development expenditures) are less likely to do LBOs.