Abstract:The purpose of this paper is to examine the causal relation between deviations from target capital structure (leverage deficit) and acquisition choices in capital markets in Western Europe. The analysis is conducted using a sample of 921 large companies, which represents a strong and solid base for testing target capital structure and takeover interdependence, as the focus is on the period when half of the largest M&A deals in Western Europe occurred. This study found that leverage deficit is a crucial determi… Show more
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