Handbook of Corporate Finance Empirical Corporate Finance Volume 1

114 S. Dasgupta and R.G. Hansen tions, in which the seller is trying to secure the best price for the firm’s shareholders by com ...

Ch. 3: Auctions in Corporate Finance 115 terminated.^25 Another possibility is for the target board to refuse to rescind poison ...

116 S. Dasgupta and R.G. Hansen depend on the quality of the target’s assets, or if the bidders plan to bundle these assets with ...

Ch. 3: Auctions in Corporate Finance 117 then infer that the gain from participating in the auction is low (they are not likely ...

118 S. Dasgupta and R.G. Hansen prices. Hansen argues that some information in a corporate sale is competitive in nature, and th ...

Ch. 3: Auctions in Corporate Finance 119 design, where steepness refers, roughly, to the rate of change of a security’s value in ...

120 S. Dasgupta and R.G. Hansen Burkart (1995)^32 considers a two-bidder and independent private values model. The private value ...

Ch. 3: Auctions in Corporate Finance 121 Bulow, Huang and Klemperer (1999)examine the effect of toeholds in a pure com- mon valu ...

122 S. Dasgupta and R.G. Hansen Integrating, and using the boundary conditionbi( 0 )=bj( 0 )(seeBulow, Huang and Klemperer, 1999 ...

Ch. 3: Auctions in Corporate Finance 123 the target. This result is a consequence of the fact that as the toeholds become more a ...

124 S. Dasgupta and R.G. Hansen stronger bidder may provide a higher expected profit to the seller. Thus, standard auc- tions ar ...

Ch. 3: Auctions in Corporate Finance 125 From the first-order condition, one readily getsb 1 (t 1 )=( 1 / 2 )t 1 +( 1 / 2 )θ. Th ...

126 S. Dasgupta and R.G. Hansen auction generates a higher expected sale price than both the first- and the second-price auction ...

Ch. 3: Auctions in Corporate Finance 127 own firms are overvalued but not knowing whether this is due to market-wide or firm spe ...

128 S. Dasgupta and R.G. Hansen shareholders benefit in the short run.Shleifer and Vishny (2003)argue that if target shareholder ...

Ch. 3: Auctions in Corporate Finance 129 4.7. Auctions in bankruptcy One of the most fruitful areas for the application of aucti ...

130 S. Dasgupta and R.G. Hansen firms: on average, creditors received 35% of their claims, with secured creditors receiv- ing 69 ...

Ch. 3: Auctions in Corporate Finance 131 separation in some cases; in others, cash payments or large non-pecuniary bankruptcy co ...

132 S. Dasgupta and R.G. Hansen Other work has explored signaling aspects of Dutch auction repurchases relative to fixed price t ...

Ch. 3: Auctions in Corporate Finance 133 of equilibria with varying degrees of underpricing. The intuition of the underpricing r ...