In this study we investigate the effect of payment method used in 108 acquisitions made between 2010 and 2012 with a publicly listed Swedish firm as the bidder. We also control for deal-specific characteristics such as the home country of the target firm and the value of the acquisition. We apply a standard event study methodology to find abnormal returns around the announcement day and our findings show positive short term returns for bidding firms, especially when the payment is comprised at least partially of stock. However, when controlling for payment method by the location of the target firm we find the market favors stock financing only in cross-border acquisitions.
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